NCPA - National Center for Policy Analysis

THE PERSISTENTLY POOR

December 8, 2006

Despite an intensified campaign against poverty, World Bank programs have failed to lift incomes in many poor countries over the past decade, leaving tens of millions of people suffering stagnating or declining living standards, according to a report by the bank's autonomous assessment arm.

Among 25 poor countries probed in detail by the bank's Independent Evaluation Group, only 11 experienced reductions in poverty from the mid-1990s to the early 2000s, while 14 had the same or worsening rates over that term.  The group said the sample was representative of the global picture.

"Achievement of sustained increases in per capita income, essential for poverty reduction, continues to elude a considerable number of countries," the report declared, singling out programs aimed at the rural poor as particularly ineffective:

  • Roughly half of such efforts from 2001 to 2005 did not lead to satisfactory results.
  • During that period, new World Bank loans and credits aimed directly at rural development totaled $9.6 billion, or about one-tenth of total bank lending, according to the group.

In a statement distributed with the report, World Bank management rejected its assessment as "overly bleak," arguing that the overall trend is improving in every region except Africa.  Bank administrators noted that reducing poverty requires economic growth, something they said the world has been enjoying:

  • Over the past two years, developing countries collectively grew by about 5 to 6 percent a year, excluding swiftly developing China and India.
  • Even sub-Saharan Africa has grown by more than 4 percent annually over the past five years.

But the study found that growth has rarely been sustained, exposing the most vulnerable people -- the rural poor -- to volatile shifts in their economic fortunes.  Per capita income rose continuously from 2000 to 2005 in only two in five of the countries that borrowed from the World Bank.

Source: Peter S. Goodman, "The Persistently Poor; An Internal Report Criticizes World Bank's Efforts on Poverty," Washington Post, December 8, 2006.

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