So as World Bank President Jim Yong Kim convenes the bank’s spring meetings this week, he will have in mind a subtle but significant shift in the $330 billion institution’s mission — expanding its effort to build the global middle class.
“It is going to be a laser focus” to ensure that bank projects directly address either benefits for the poor or better incomes for those approaching the middle class, Kim said in an interview last week. “We have a lot of evidence. . . . We actually know what works.”
Kim’s public statements and the dramatic banners on the bank’s 18th Street headquarters building focus on the headline-catching goal of ending extreme poverty over the next 17 years. But the world is already on track to achieve that end, even though Kim says the heaviest lifting remains to be done in places such as India and the conflict-ridden states of sub-Saharan Africa.
Given equal weight in Kim’s evolving strategy is “inclusive growth” — expanding economic progress for the bottom 40 percent of wage earners regardless of where they live. That would serve not just a moral end — capturing the billions of people worldwide who may have gained an economic foothold but are a single mishap away from trouble — but also would secure the bank’s role in the large middle-income countries that are growing smartly on their own, rather than risk a winnowing of its mission to a few pockets of severe poverty.
Those nations have access to private capital markets on terms that are often more convenient, if slightly more expensive, than those offered by the World Bank Group’s main lending arm, the International Bank for Reconstruction and Development (IBRD).
But the bank needs them to spin the profits that pay the salaries for 14,000 staffers around the world and subsidize the work of the International Development Association (IDA), the branch of the umbrella World Bank Group that gives cut-rate loans and grants to poorer nations. The IBRD, on the basis of capital paid in by members such as the United States, sells bonds on the open market and lends that money to developing countries, charging upfront fees and interest.
A draft of the “Common Vision for the World Bank Group,” posted online by the Government Accountability Project, describes an organization “overstretched” by the breadth of what it does and needing to “identify and validate our actual comparative advantages in the context of today’s global economic landscape.”
“Even if extreme poverty has ended in many countries — and were to end globally in the foreseeable future . . . poverty continues to exist in most countries as defined by the specific standards of each society,” the document states, in a focus on relative rather than absolute measures of deprivation. The bank, the document said, will begin to analyze incomes and economic progress for “the bottom forty percent of every country,” providing it a perpetual constituency and potentially pushing its attention to issues of income inequality in the developed world.