Participants of the Ultra-Poor Graduation program utilize technology to ensure financial literacy best practices in Rangpur, Bangladesh (BRAC 2018)

Opinion: The World Bank’s Evolution Is a Chance to Accelerate the End of Extreme Poverty

By Shameran Abed, Executive Director, BRAC International and Joanne Carter, Executive Director, RESULTS/RESULTS Educational Fund

The World Bank is evolving, but can it widen its mandate without losing focus on ending extreme poverty?

Cascading crises that include COVID-19, the Ukraine war, rising inflation, and climate extremes are making the fight against poverty ever more complex. Presented with this shifting landscape, we must support the World Bank’s efforts to evolve to better support governments in driving sustainable development.

However, in a world where lack of prioritisation over recent years has already led to a slowing of poverty reduction, the Bank must ensure its evolutions do not result in losing further momentum towards this goal.

As part of a community of practice of NGOs, researchers, and development practitioners closely associated with the Partnership for Economic Inclusion hosted by the World Bank, BRAC and RESULTS are dedicated to reaching Sustainable Development Goal 1 (End Poverty) through scaling holistic, evidence-informed interventions.

Our experiences as advocates and implementers lead us to believe that to be, as World Bank President Ajay Banga put it, a “catalyst for change” to accelerate poverty reduction and get back on track for its goal to reduce extreme poverty to 3% of the global population by 2030, the Bank needs to do four things:

  1. Adjust its mission statement to reaffirm its commitment to reaching those who live in conditions of profound poverty, vulnerability, and marginalisation. The new statement could read: “To accelerate ending extreme poverty and boost shared prosperity by fostering sustainable, resilient, and inclusive development.”
  1. Protect IDA funding for low-income countries. These countries need these resources to design and implement programs, systems, and structures that enable poverty reduction. Even if IDA’s new Crisis Facility reaches its fundraising target of $6 billion this year, IDA funding could fall by up to $12 billion in 2024-2025. While the World Bank will need to mobilize new resources to address global challenges like climate change and future pandemics, this cannot come at the expense of the poorest countries. With Germany announcing a 305-million-euro investment in the World Bank for global public goods, will it be able to sustain this generosity when the next replenishment of IDA is launched this December?
  1. Prioritise projects for the poorest segments of populations when determining the concessionality of its financingincluding grants and zero or low-interest loans. The larger the population in extreme poverty, the more vulnerable a country is. This holds true even if the country has reached middle income status. Concessional financing should prioritise projects that build resilience for the poorest segment of the population, such as Graduation and climate-resilient livelihoods programs.
  1. Hold itself accountable and ensure poverty reduction and development projects reach the people who are poorest and most vulnerable. Currently, the IDA 20 Results Measurement System (RMS) lacks disaggregated data on extreme poverty – and we cannot eliminate what we cannot measure. The Bank must strengthen the IDA RMS to include indicators on the number of people in extreme poverty impacted.
*These recommendations have been submitted as a joint letter to the World Bank alongside more than a dozen NGOs and senior development leaders.

The World Bank’s evolution roadmap process is a rare opportunity to adjust course and better deliver sustainability and resilience in the face of an increasingly complicated reality.

But as it considers changes to its operating and financial models throughout this year, calls from civil society, particularly from the Global South, to prioritise those affected by the deepest poverty must not be ignored.

Photo: Participants of the Ultra-Poor Graduation program utilize technology to ensure financial literacy best practices in Rangpur, Bangladesh (BRAC 2018)