WASHINGTON: China’s new development bank can have an important role in fighting extreme poverty if it establishes high standards for its projects, World Bank President Jim Yong Kim said Tuesday.
Vowing to work with an institution resisted by the United States, Kim called the Beijing-led Asian Infrastructure Investment Bank (AIIB) “a major new player in development” that is a “potentially strong” ally in its own work to help development in the poorest countries.
“If the world’s multilateral banks, including the Asia Infrastructure Investment Bank and the New Development Bank, can form alliances, work together, and support development that addresses these challenges, we all benefit—especially the poor and most vulnerable,” Kim said in a Washington speech.
“It is our hope—indeed, our expectation—that these new entries will join the world’s multilateral development banks and our private-sector partners on a shared mission to promote economic growth that helps the poorest.”
Despite Washington’s resistance, China has received applications from more than 50 countries, including important US allies, to join the AIIB, which will aim at financing infrastructure development around Asia.
The United States and Japan though have resisted joining, with Washington warning that the AIIB needs to erect strong standards for lending and project development, and be fully transparent in its approach.
The United States sees the AIIB and a development bank planned by the BRICS emerging-market countries, the New Development Bank, as competitors to the World Bank and the Asian Development Bank, where the United States is the largest shareholder.
Speaking at the Center for Strategic and International Studies in Washington, Kim echoed that concern.
He stressed that only “with the right environment, labor and procurement standards” can the two new institutions become important forces to fight poverty.
In that case, he said, “the World Bank Group sees these development banks as potentially strong allies.”
Kim said he will have talks with Chinese authorities next week at the World Bank’s spring meetings in Washington on potential cooperation.
“I will do everything in my power to find innovative ways to work with these banks,” he said.
– Call to boost growth –
Kim said such work would help achieve the World Bank’s goal of ending extreme poverty—lifting the livelihoods of those living on less than $1.25 a day—by 2030.
He said that the number of people below the line has fallen from two billion to one billion in 25 years, despite a two billion increase in the total world population.
Kim stressed that more effort is needed to boost global economic growth.
“The world economy needs to grow faster, and grow more sustainably. It needs to grow in a way that ensures the poor receive a greater share of the benefits of that growth.”
With most of the poorest people living in rural areas, Kim said, a key focus of the anti-poverty fight is to boost farm yields so that incomes increase.
Part of that, he noted, depends on improved infrastructure.
“Helping farmers improve yields requires the introduction of increasing access to better seeds, water, electricity and markets.”
“We know that ending extreme poverty will be extraordinarily difficult—in fact, the closer we get to our goal, the more difficult it will be,” Kim said.
“Some say it’s impossible to end poverty – especially in just 15 years. But we know it’s possible.”