Hi everyone. Thank you for coming to the press conference, which opens the 2013 Spring Meetings of the World Bank Group and IMF. First, let me again express my deep condolences of the family and friends of people who died or were wounded in the attack in Boston earlier this week.
Just a couple of weeks ago, I outlined an ambitious agenda for the global community that called for a two-pronged approach for a world free of poverty.
The first is virtually ending extreme poverty by 2030. The second is promoting shared prosperity by fostering income growth of the bottom 40 percent of the population in every country. And for that second goal, we also mean sharing prosperity across generations, and that calls for bold action on climate change.
I have no doubt that the world can end extreme poverty within a generation, but this will be much harder than most people realize. It is far from a given. It will take ingenuity, focus, commitment, and visionary leaders. But if we succeed, we will have accomplished one of humankind’s most historic accomplishments.
Let’s take a look at the situation in the world today. More than four years after the start of the financial crisis, high-income countries continue to struggle with high unemployment, weak growth and economic fragility.
The good news is that taken as a whole developing countries are doing relatively well, with growth expected to reach about 5.5 percent this year. That should strengthen to just under 6 percent by 2015. Indeed, developing countries are accounting for more than half of global growth.
But too often we lose sight of the fact that this overall story hides a wide range of outcomes across countries. In Africa, about a quarter of the countries grew at 7 percent or higher last year and a number of them are among the fastest growing in the world. In East Asia and the Pacific, output is expanding rapidly amid fears of overheating and asset bubbles. But growth in several major middle-income countries, including Brazil, India, Russia, and Turkey, has slowed in part because of unresolved bottlenecks in these economies.
Elsewhere in the developing world, recovery has been more elusive.
This diversity of experience among developing countries means that there is no “one-size fits all” prescription for policy, and external developments can no longer be seen as the principal source of problems. Now more than ever, solutions need to be found in domestic macroeconomic and structural policies that address the distinct conditions in individual countries.
If we are to end extreme poverty within a generation, we’ll need at least three things to happen. First, the high growth rate in the developing world over the past 15 years must accelerate. Second, growth has to translate into poverty reduction and job creation and it must be inclusive and curb inequality. And third, we must avert or mitigate potential shocks, such as climate disasters or new food, fuel, or financial crises.
In particular, doing better on growth means doing even more of the kinds of reforms that have underpinned the strong developing-country growth of the past 15 years. That means eliminating bottlenecks; additional investment in infrastructure; and, to ensure that the poor participate in the benefits of growth, much greater investments in education and health care.
As we move ahead, we must address climate change with a plan that matches the scope of the problem. Climate change is not just an environmental challenge. It is a fundamental threat to economic development. Unless the world takes bold action now, a disastrously warming planet threatens to put prosperity out of reach of millions and roll back decades of development and poverty reduction.
At the World Bank Group, we are stepping up our mitigation, adaptation, and disaster risk management work. Some 130 countries have asked the World Bank for assistance in climate-related work.
Also, as we move toward these poverty goals, we also must be far more effective in fragile and conflict affected states. We now hope to shift more funding toward fragile states under our concessionary lending fund, the International Development Association, or IDA. If we hope to meet our goals of ending poverty and boosting shared prosperity, we must be successful in fragile states. Next month, UN Secretary-General Ban Ki-moon and I will travel to the Great Lakes region of Africa. I believe that the combined efforts of the United Nations and the World Bank Group on political, security and development fronts can make a major difference in moving fragile states out of fragility.
Thank you. I’ll now take your questions.