Thursday, August 9, 2012

The World Bank - A New Progressive Mission?

Late last month, the new President of the World Bank, Jim Yong Kim, who was advanced to lead the organization by President Barack Obama from being the former President of Dartmouth College, spoke with the left wing British newspaper 'The Guardian' about his new mission for the World Bank - 'I want to eradicate poverty...'
"The evidence suggests that you've got to do a lot of good, good things in unison, to be able to make that happen," said Kim. "The private sector has to grow, you have to have social protection mechanisms, you have to have a functioning health and education system. The scientific evidence strongly suggests that it has to be green – you have to do it in a way that is sustainable both for the environment and financially. All the great themes that we've been dealing with here have to come together to eradicate poverty from the face of the Earth."

…Nevertheless, he is a big proponent of social protection policies. "I've always been engaged in social protection programmes. But now it is really a signature of the World Bank. We're very good at helping people look at their public expenditures and we say to them things like, fuel subsidies really aren't very helpful to the poor – what you really need is to remove fuel subsidies and focus on things like conditional cash transfer plans. The Bank is great at that."

New to him are climate change and sustainability, he says. "We are watching things happen with one degree changes in ocean temperature that we thought wouldn't happen until there were two or three degree changes in ocean temperature. These are facts. These are things that have actually happened … I think we now have plenty of evidence that should push us into thinking that this is disturbing data and should spur us to think ever more seriously about clean energy and how can we move our focus more towards clean energy."
Social justice.  Climate change.  Sustainability.  The World Bank, under Kim, is going to be Obama lite - led by another far left progressive academic who believes that poverty is 'eradicated' by the redistribution of wealth as it's 'fair' - and remains clueless to the fact that these steps create far more problems than they solve.

In Forbes Magazine, comes a compelling case that the smartest move might be to totally shut down the World Bank as an obsolete non-government entity that no longer has a real mission.
Whatever the merits of individual Bank projects—and the institution has backed some notable disasters over the years—only private sector development in Third World states will raise people out of poverty. And private sector development of the sort which reaches throughout society is possible only without government direction or control. Which means the less World Bank lending, the better.

Nancy Birdsall contended that “A new president needs to corral shareholders and disparate interests to create a fresh mandate for the bank.” Best would be no mandate at all.

The World Bank was created in a different age and time. “The World Bank doesn’t have any obvious role in the current world environment,” observed Easterly: “It’s in a state of crisis, losing its traditional market share.”

In contrast, Kim argued that “the World Bank’s best days are still ahead,” pointing to: “The economic success of emerging market economies, the rise of citizen power led by young people and the unprecedented penetration of new technologies are challenging old development paradigms.” All true—but all good reasons why the Bank is no longer needed.
In Africa, for example, funds from the People's Republic of China are flooding into the region - buying friends and allies from the recipients.  None of these are benign governments or rulers.  Poverty remains endemic throughout much of Africa.  Lost in the shuffle are the really effective and limited efforts by the US and a few international aid organizations who are targeting specific issues like AIDS and Malaria - but still have challenges working through or around the corruptocrats that control so many of those countries and are interested not in eradicating poverty, but enriching their bank accounts and staying in power.

In Africa, as in the United States, the governing elite are the greatest threat to the World's middle class - and the World's middle class is the springboard to really eradicating poverty.

Not even in this country are we really interested in eradicating poverty - because under the social justice, 'fairness' advocacy of President Barack Obama and his fellow progressive Democrats, the goal is all about putting even more people on welfare and government dependency....
The federal government actually runs 126 separate anti-poverty programs. They're managed by 13 different agencies.

We use the word "welfare" to describe money that goes to needy people. But the government's war on poverty is a whole lot bigger. And it's rife with waste and redundancy.

The federal government runs 33 different housing programs: 21 programs to provide food, eight healthcare programs, 27 cash or general assistance programs. It's hard to find a government department that doesn't run an anti-poverty program. All this adds up -- and this is just the federal government.

If you also include state and local spending, the government will spend nearly a trillion dollars this year fighting poverty. That's almost the size of the national deficit this year.

Now let me be clear, I don't object to poor people getting help. My problem is a government throwing money at programs that clearly aren't working. Consider this: All this welfare spending adds up to $20,610 for every poor man, woman and child in the country.

For a poor family of three, that's nearly $62,000 dollars. The poverty line for that family is just $18,500. With this kind of spending, poverty should be wiped out - instead it's growing.

Today, one in seven Americans is living in poverty. The most in almost two decades. All the while spending is soaring.

And, welfare spending for the last four decades -- adjusted for inflation? Up, up, up. How can we spend all this money, and see so little progress?
We don't eradicate poverty by creating and perpetuating cycles of dependency.

But perhaps the progressives can take a hard look at history - and Adam Smith as a foundation, and the US Founding Fathers as another, to see how poverty, if not eradicated, can be eliminated for so many as they find welcome paths into the middle class - and perhaps beyond.

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