World Bank backs global conference on poverty reduction in developing nations

Producer: Melanie Yip
First broadcast: 26 May 04, Radio Singapore International

Delegates and policy makers from developing countries have joined forces to demand more financial assistance from richer nations to help the poor.

The Global Conference on Scaling up Poverty Reduction was held today in China.

It is backed by the World Bank, and leaders like Chinese Premier Wen Jiabao urged more action than rhetoric from wealthy nations.

Just how disadvantaged are developing nations by international globalization?

Melanie Yip put the question to Peter Stephens (PS), Regional Communications Manager at the World Bank Office in Singapore.

PS: The biggest imbalances that are capable of being fixed include the amount of money that is spent on development assistance, like $20 spent on defense, every $1 goes into helping developing countries. And the same applies for agricultural subsidies. The amount that goes into agricultural subsidies around the world is about 6 times more than the amount that goes into developing countries. So you can see that in terms of direct financial assistance, the rich countries are spending more to protect their farmers, and to equip their armies than they are to helping the billions of people who live on barely one dollar a day. And these poor people struggle to make ends meet around the world. It's not just a question of handing money out, it's a matter of allowing people/countries to compete openly and fairly, in areas that they are able to compete.

What are some of the possible solutions to eradicate, if possible, the problem of poverty in some of these developing or under-developed countries?

PS: Well, a lot depends on the countries themselves. Leaders in countries that are poor need to recognize that it is a very competitive environment for development assistance, and for foreign direct investments. And the money tends to go where it can create the most good. For example, China gets about $50 billion dollars a year in foreign direct investments. That represents about 80% of all the direct investments that go into the developing world. When you look at a country that has made it from developing world to developed country status like Singapore, it's hard not to be struck by the simple and hard decisions that were made early on, when the leaders of this country decided that corruption was simply, not an option. And corruption in Singapore would be stamped out from day one. There are not many countries that I can think of that have taken that step, and as a result, they continue to pay a price for all the corruption they allow.

You mentioned about corruption. How about problems like redistribution of wealth? Sometimes, poverty stems from inefficient governance?

PS: Absolutely. This is an area that the World Bank is concentrating more on by devoting more of its time and resources to either draw attention, or where we can possibly fix it, to fix. This is about governance, proper administration of government and allocation of resources. If you're talking about countries where the average annual income is US$300-400, clearly, there isn't a lot of room for immediate and dramatic progress and mediation. This will take time. The World Bank is more rigorous in screening, monitoring and auditing. At all levels of government, be it management of public finances, transparency in bidding or procurement, or simply, disclosure of outside interests. There are so many areas where the World Bank is pushing hard. Frankly, the better the governance of developing nations, at both the political ad corporate levels, the more effective they will be in attracting scarce dollars to their countries.

The current debate in the international agenda focuses more on security issues. So, in your view, how can we bring more attention to social issues like poverty in developing or third world nations?

PS: I think tragedies, like terrorism and war, are huge distractions from the serious business of alleviating poverty, but it is an inevitable distraction. War and terrorism are the enemy of progress. You cannot have sustainable development under those circumstances. I mean, if you are in the government around the world, you have to look after domestic security and it would be negligent of you not to. The great shame is that security does not come for free. And the money that going to those issues of security and countering terrorism is not the money that can go into helping China, Vietnam, Laos, Cambodia and other places that desperately need help.