Wading into the funding clashes consuming Washington, World Bank President Jim Yong Kim bluntly warned Tuesday that America’s financial woes could have grave consequences for some of the world’s poorest economies.
“When we look across the world today and think about the most pressing issues, the ongoing fiscal uncertainty in the United States greatly concerns us,” said Mr. Kim.
“This uncertainty, combined with other sources of volatility in the global economy, could do great damage to emerging markets and developing countries in Africa, Asia and Latin America that have lifted millions of people out of poverty in recent years,” he said.
Speaking at an international affairs event at George Washington University just 10 days before the World Bank holds its annual Washington gathering, Mr. Kim emphasized the financial connection between well-developed nations and nations still facing high poverty rates.
The World Bank chief added that the economic and political troubles in lesser-developed nations could in turn affect the U.S.
“When we fail to help countries develop in a way that is inclusive or fail to help countries build strong governance, we are all affected by the result, which is often a country engulfed in flames, as is Syria today,” he said.
Mr. Kim said the bank and the global community have a responsibility to maintain economic and institutional stability in fragile states.
He suggested that much of the current conflict in the Middle East is a direct result of a lack of access to the global market.
“The protests during the Arab Spring, and the more recent ones in Turkey, Brazil and South Africa, were rooted in the universal desire to participate in the global middle class,” said Mr. Kim.
Macroeconomic and cultural challenges, he noted, would be “daunting for any single country. But they have all come together in one region. That makes it all the more important for the international community to marshal its resources to support those brave women and men who risked their lives to demand the basic human dignity that is their due.”
The World Bank is pushing for policies on macroeconomic stability to deal with the current unrest in the Middle East to promote the transition to new governments and fairer elections.
The World Bank’s Middle Eastern emphasis is a part of a larger global effort to end extreme poverty by 2030.
“The fact that more than a billion people live on less than $1.25 a day in 2013 is a stain on our moral conscience,” said Mr. Kim.
Largely based on economic gains in lower developed countries, economists estimate that 150 million fewer people now live in poverty than in 2010.
Moving forward, Mr. Kim believes that “looking beyond the overall GDP growth” would allow world leaders to determine whether fiscal growth extends to all the population and not just the elite.
Mr. Kim said the World Bank plans to partner with the private sector in its drive to end extreme poverty.
Ultimately, however, Mr. Kim believes that economic stability and competitiveness begins and ends with the individual country.
“We will always look for opportunities to help countries invest in their people,” said Mr. Kim. “We must help countries become more competitive, and a powerful way for them to do so is by investing in the education, health and job training of their citizens.”
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