WASHINGTON (AP) – Global poverty can be cut in half by 2015 if rich countries lower trade barriers and increase foreign aid, the World Bank said Sunday.
Poor countries can help themselves by investing more in health and education, the bank said.
But a new bank report said even if worldwide economic growth stays on track, poverty will remain severe in Africa, where the number of poor is likely to climb from 315 million in 1999 to 404 million in 2015. Poverty also is on the rise in the Middle East, the bank said.
“Growth alone will not be enough to halve poverty by 2015,” said Nicholas Stern, the bank’s chief economist.
“Developing countries need to ensure that all people, and especially poor people, have access to education, health care and put in place the right investment climate to crease opportunities, spur productivity and make real improvements in peoples lives.”
In a sign wealthy nations were offering more aid, Treasury Secretary John Snow said the United States would give the bank $100 million in the budget year starting Oct. 1 for low-interest, long-term loans to poor countries.
Snow, who made the announcement at the spring meetings of the World Bank and the International Monetary Fund, said the United States might provide an additional $200 million in 2005 if developing countries show progress in education, health and private sector development.
Stern said the bank hoped “rich countries will follow through on their aid commitments and will take action on trade,” particularly on agriculture subsidies at the World Trade Organization meeting in Mexico in September.
Developing countries maintain that the $300 billion a year that wealthy nations pay their farmers in subsidies drives down the price of commodities produced by poor nations. That makes it hard for them to sell goods at a profit and improve their economies.
The bank report outlines the sharp differences between life in poor and rich countries.
It shows that during the 1990s there was rapid progress in reducing the number of poor people who live on less the $1 a day, the bank’s definition of poverty.
The report said the numbers dropped from 1.3 billion in 1990 to 1.6 billion in 1999 but these gains occurred largely in India and China, whose economies made strong progress during the decade.
The number of poor rose in Eastern Europe and Central Asia from 6 to 24 million. from 48 million to 57 million in Latin America, from 5 to 6 million in the Middle East and North Africa, and from 241 million to 315 million in Africa.
The bank said lower trade barriers by well-off countries could boost annual growth in developing countries by an extra 0.5 percent over the long run and lift an additional 300 million out of poverty by 2015.
“Trade can spur development by expanding markets for developing countries exports,” Stern said.
“Poor countries are facing huge rich country barriers in exporting those products that play the best to their comparative advantage – namely agricultural goods and textiles.”
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