April 23, 2004
World Bank Says Number of Poor Decreasing
Associated Press

The international community is on target to halving the number of people living in poverty in developing countries by 2015 but more aid, trade and government reform will be needed if more progress is to be made, the World Bank (news - web sites) said Friday.

By HARRY DUNPHY, Associated Press Writer

WASHINGTON - The international community is on target to halving the number of people living in poverty in developing countries by 2015 but more aid, trade and government reform will be needed if more progress is to be made, the World Bank (news - web sites) said Friday.

Strong economic growth in India and China has led to a substantial reduction in the number of poor, which the bank defines as people living on less than $1 a day. But in other areas of the world, especially sub-Sahara Africa, the number of poor has increased.

"There is good news," said Francois Bourguignon, the bank's chief economist. "Global poverty is falling rather quickly. We are on target to reach the first millennium development goal by 2015."

These goals, which cover such areas as education, health and clean water, were set by U.N. member nations four years ago. The first goal was to halve between 1990 and 2015 the proportion of people living below the bank's dollar line.

Bourguignon presented the World Bank's annual statistical report, "World Development Indicators" at a news conference held as the bank and its sister institution, the International Monetary Fund (news - web sites), began their spring meetings.

Between 1981 and 2001, the number of poor people fell to 1.1 billion from 1.5 billion or to 21 percent from 40 percent of global population, according to the bank's figures.

Bourguignon said it was important to keep working on reducing poverty in all areas of the world, warning poverty could become an African problem rather than the Asian problem it was 20 years ago.

He said "economic growth was the driver of poverty reduction" but rich countries also had to increase aid to developing nations. He said while rich nations are providing more aid the amount "is far from what is needed."

Bourguignon also said rich countries should reduce or eliminate the $300 to $350 billion they pay in agriculture subsidies so farmers in developing countries can find markets for their products. He said if this happened millions of people would rise above the poverty level.

He said other factors in poverty reduction were good government in developing countries and modern roads, ports, electricity and other infrastructure.

Finance ministers and central bankers from around the world were arriving in Washington for the World Bank-IMF meetings where poverty reduction, debt relief, the state of the global economy and U.S. deficits were among topics to be discussed.

Treasury Secretary John Snow said the soaring U.S. budget deficit is not a threat to the global economy.

Sounding an optimistic note before he and Federal Reserve (news - web sites) Chairman Alan Greenspan (news - web sites) hosted a meeting of the Group of Seven major industrial nations, Snow said Thursday that the U.S. economy is in far better shape than it was last spring. Analysts then were worried that anemic growth would plunge the United States into another recession.

"We're on very solid footing, our upward trend is strong," Snow said, listing a number of upbeat economic signs, from growth in the gross domestic product to rising exports and the creation of 300,000 payroll jobs in March, the biggest one-month gain in four years.

"I anticipate that this economy will be creating a lot more jobs in the coming months," Snow said in a speech to the Bond Market Association in New York.

Sen. John Kerry (news - web sites), the presumptive Democratic presidential nominee, and other Democrats are trying to make an issue of job losses that occurred since President Bush (news - web sites) took office, especially the 3 million manufacturing jobs that have disappeared. Kerry also said Bush's tax cuts favor the wealthy and have saddled the government with record budget deficits.

Snow, however, said the tax cuts have stimulated the U.S. economy. He also said the Bush administration has a plan to cut this year's projected $521 billion budget deficit in half over the next five years.

"The deficit is too large, but it is understandable and it is manageable," he said.

The International Monetary Fund has criticized U.S. budget policies and wants to see quicker action to deal with the deficit so that interest rates don't rise too rapidly and put a brake on the global economic growth.

The IMF also is worried about America's rising current account trade deficit, the broadest measure of foreign trade measure of foreign trade, which hit a record $541.8 billion last year.

The concern is that if overseas investors lose confidence in loaning the United States money, the dollar's value could sink, investors would flee, stocks would plunge and interest rates would soar.

Finance officials from the G-7 nations_ the United States, Britain, Canada, France, Germany, Japan and Italy — begin their discussions Friday night and continue Saturday morning. Those talks are being held in advance of the spring meetings of the IMF and its sister institution, the World Bank, which are scheduled for Saturday and Sunday.

As usual, protest groups demonstrated against the two lending agencies, using the theme of "Unhappy Birthday" in recognition of the both organizations' 60th anniversary.

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