International Mining has been in Lima, Peru as the 2015 World Bank Group and International Monetary Fund Annual Meetings came to a close. The focus shifted to the obstacles to ending extreme poverty and boosting shared prosperity. In its communiqué, the Development Committee said economic risks have risen for 2015 and 2016, weighing on confidence in many developing countries.
One week ago, the World Bank Group announced that the number of people living in extreme poverty was projected to dip below 10% of the world’s population in 2015 for the first time.
But as the meetings came to a close, the focus shifted to the obstacles to ending extreme poverty and boosting shared prosperity: climate change, weak global growth, and ongoing crises in fragile states.
In its communiqué, the 25-member Development Committee of the Bank Group and Fund said economic risks have risen for 2015 and 2016. “Prospects of tighter financing conditions, slowing trade, and renewed weakness in commodity prices are weighing on confidence in many developing countries,” it said. The committee called on the Bank Group and IMF to monitor economic risks and vulnerabilities and “enhance their assistance” to countries.
In a speech to the full membership of the Bank Group and Fund, Jim Yong Kim, World Bank Group President, acknowledged the challenging conditions. “While we remain confident of ending extreme poverty, the final stretch will be extremely difficult because we are in the midst of a period of slow global growth, the end of the commodity super-cycle, pending interest rate hikes, and continued flight of capital out of emerging markets.
“To spur growth, every dollar of public spending should be scrutinised for impact. Every effort must be made to improve productivity,” he said. “And in a period when banks are de-risking, we have to ensure that capital is accessible — especially for small business owners and entrepreneurs who will create jobs.”
The Annual Meetings — the first to be held in Latin America since 1967 — dealt with a wide variety of global issues, as well as some focused on the host region. A series of live-streamed events discussed inequality, the economic slowdown, renewable energy, climate change, and the Bank’s twin goals of ending extreme poverty by 2030 and boosting shared prosperity. The events featured government ministers, development experts, CEOs, and celebrities. The Bank also released economic updates during the week for Latin America and the Caribbean, East Asia and Pacific, Africa, and South Asia.
One pressing global issue that drew particular attention was the global crisis surrounding refugees and migrants. The Development Committee, in the communiqué, said the crisis requires “targeted support” for “countries and regions in turmoil, especially in the Middle East and North Africa, but also in other fragile and conflict states.”
“If world leaders do not find a path to low-carbon growth that will keep global warming below an increase of 2oC, there is little hope of ending extreme poverty — and even more broadly, there is little hope of preserving the Earth as we know it for our children and grandchildren.”
Finance Ministers of the ‘Vulnerable Twenty’ (V20) representing close to 700 million people from 20 countries around the globe, hold their inaugural meeting during the Lima meetings on October 8. The new group is calling for a significant mobilization of public and private finance for climate action at the international, regional and domestic level ahead of the COP21 talks in Paris.
The V20 was created to share and scale up innovative approaches to climate finance developed by those countries most affected by climate change.
Led by the Philippines, the V20 group say they represent a significant number of nations most vulnerable to climate change – low and middle income, least developed, arid, isthmus, landlocked, mountainous and small island developing countries from Africa, Asia, the Caribbean, Latin America and the Pacific.
In a communique marking the first meeting of their finance ministers, the V20 group said because of climate change, they are already facing an average of more than 50,000 deaths a year, with the number expected to rise exponentially by 2030.
And they say they face escalating annual losses of at least 2.5% of their GDP potential per year.
Speaking at the launch, on the sidelines of the meetings, Cesar Purisima, Finance Minister of the Philippines said costs would rise without concerted action. “In the absence of an effective global response, annual economic losses due to climate change are projected to exceed $400 billion by 2030 for the V20, with impacts far surpassing our local or regional capabilities,” he noted. “Here in Lima, we unite for what we believe is the fundamental human rights issue threatening our very own existence today. Global climate action gives us hope that we can still see a future free from the most devastating effects of climate change.”
Afghanistan, Bangladesh, Barbados, Bhutan, Costa Rica, Ethiopia, Ghana, Kenya, Kiribati, Madagascar, Maldives, Nepal, Philippines, Rwanda, Saint Lucia, Tanzania, Timor-Leste, Tuvalu, Vanuatu and Vietnam are all members of the V20.
“The world needs stronger voices from developing countries to draw more attention to their great needs for investment in fighting the impacts from climate change,” said Kim. “This new group of 20 countries, led by the Philippines, will play an important role in pushing for greater investment in climate resiliency and low carbon growth at home and internationally.”