In 2005 millions rallied to the war on poverty, but poor countries also have a responsibility to use aid effectively and transparently, says Paul Wolfowitz
This past year, the international community has rallied around high-profile summits, concert stadiums and street demonstrations to demand action in the global fight against poverty. These events triggered a series of declarations and pledges that promised hope to the 1.2 billion people trapped in extreme poverty worldwide.
At the G8 summit in Gleneagles last July, world leaders reached a groundbreaking agreement to double aid to Africa and cancel the multilateral debt of the world’s poorest countries. At the annual meetings of the World Bank and the International Monetary Fund last September, our shareholders brought the Gleneagles promise closer to fruition with firm pledges to cover the costs of debt relief and maintain their regular aid contributions.
The United States and the European Union took bold steps to offer large cuts in farm
aid and export subsidies at the World Trade Organization talks in Hong Kong. A successful Doha round holds the promise of opening major global markets to small farmers in poor countries and lifting millions of people out of poverty.
These developments are extraordinary. They reflect a growing global consciousness that in an interconnected world – with the resources, knowledge and expertise at our disposal – we stand accountable for improving the lives of the poor. It is not only a moral responsibility, but also a social, economic and political imperative.
Significant progress has been made in advancing the global development agenda this year. Now donor countries must move beyond commitments to developing concrete plans that make effective use of aid – plans that deliver results for the poor. For their part, developing countries must continue their efforts to build transparent and accountable institutions that promote growth and respond to the needs of the poor.
The challenge of Africa
For the World Bank and other donors, much of the hardest work ahead lies in sub-Saharan Africa. With the highest proportion of poor people in the world and staggering needs in jobs, health, education, nutrition and more, the challenges are daunting.
The number of people in sub-Saharan Africa living on $1 a day has nearly doubled from 164 million in 1981 to 303 million in 2002, despite more than $300 billion spent in development assistance during the same period. One-third of the population lives in conflict-affected countries. And HIV/AIDS, malaria and other preventable diseases continue to undermine development and threaten lives.
Economic growth during the past 25 years averaged 2.3% a year in sub-Saharan Africa. This has not been enough to keep per capita incomes from falling, and it is far short of what is needed to reduce poverty. Without much faster progress, the number of poor people on the sub-continent is expected to rise to 336 million in the next 10 years.
In 2000, world leaders made a resolute commitment to fight deprivation and suffering by adopting the Millennium Development Goals (MDGs), setting clear targets to cut poverty in half and improve basic living conditions in developing countries by 2015. The MDGs have become a useful metric of accountability, serving as an important tool for measuring the international community’s progress towards its promises.
Given the sheer scale of hunger, poverty and disease, we know today that many countries – mostly in sub-Saharan Africa – are not on track to meet these goals by 2015. We also know that there are many countries that will meet some or all of these goals. But with less than a decade to go, there is difficult work ahead.
Both rich and poor countries will have to think about how to make effective use of the additional aid that has been promised. It is also important to focus development assistance where it can make a difference. Combined with new trade opportunities and continued improvements in governance, there is a real chance for Africa to become a continent of hope.
Striving for results
Today, Africa is at the top of the World Bank’s development agenda. Our work is driven by the urgent need to create opportunities and jobs for the people of Africa. Now, more than ever, aid must be spent wisely to bolster national efforts to deliver tangible results for the poor.
To help African countries accelerate growth and move closer toward the MDGs, the World Bank developed an Africa Action Plan – a results-driven plan that places African countries in the driver’s seat. It consists of 25 initiatives to accelerate development in the next three years.
The Africa Action Plan establishes clear commitments that include increased financial support for free primary education in 15 countries, and increased funding for roads, power and other infrastructure programmes from $1.8 billion per year to $2.8 billion in two years, with an additional $2.5 billion from other donors.
But it does not stop there. Each action will be directed at precise indicators of progress to be achieved within a given period of time. Under the Malaria Booster Program, which focuses on 17 African countries, clear targets have been set for 2008. Bed nets will be made available so that 60% of the populace is covered, and 60% of the affected populace will have access to treatment within 24 hours of symptoms.
Successful development will depend, in large part, on the ability of African countries to embrace governance reforms, to build strong and accountable institutions, raise growth rates and create opportunities for the poor, particularly women.
To foster these conditions, the Africa Action Plan provides a blueprint to support policy and actions that target strong governance, growth and job creation.
The plan is ambitious, and the World Bank alone cannot address Africa’s needs in these areas. It will require partnerships and closer coordination with donors and African countries. It is only through our collective efforts that we can rise to the challenge of creating real opportunities for the poor to improve their lives and provide a better future for their children.
Reasons to be hopeful
If we look at the achievements of the last half-century, there is much reason to be hopeful. The past 25 years have seen dramatic improvements in living conditions around the world. The number of people living below $1 a day decreased by some 400 million worldwide – the largest drop in poverty in centuries. Much of this decline was driven by high economic growth in countries with large numbers of poor people, such as China and India.
The experience of China and India, and the earlier experience of smaller East Asian countries, such as South Korea, Taiwan, Hong Kong and Singapore, should be a source of inspiration for Africa and the rest of the developing world. Only 40 years ago, scholars assumed many of these countries would fail because they apparently lacked the elements for successful development. Yet, in a span of a few decades, East Asia experienced the greatest increase in wealth for the largest number of people in the shortest period of time in human history.
Today, a new leadership is emerging in Africa that is increasingly open to change and committed to fighting poverty. These leaders and their people are stepping up to their responsibilities and taking charge of their future. And they have progress to show for it.
Many countries are taking greater ownership and accountability for their development programmes. After steep declines between the mid-1970s and the late 1980s, some African economies have shown improvement. In the past decade, 16 African countries have seen their economies grow by more than 4.5% per year. And the Bank’s performance ratings of their policies and institutions have been rising.
These are promising achievements. But Africa needs to do more if it is to face the great challenges ahead. Rich countries and multilateral institutions must build on the momentum of the past year, and help the people of Africa and their leaders to strengthen their governance, use aid effectively and deliver results for the poor.
We live in an interdependent world. The global community has a stake in transforming Africa into a continent of hope. The 600 million people on this vast sub-continent have dreams and expectations of moving forward with the rest of the world.
At the World Bank, we have made a commitment to do everything we can, in partnership with rich and poor countries, to turn this hope into reality.
CV Paul Wolfowitz
Paul Wolfowitz is president of the World Bank. He has spent more than three decades as a public servant, ambassador and educator, including 24 years in government service under seven American presidents.