The World Bank

A well-known Chinese proverb says “give a man a fish and you feed him for a day; teach a man to fish and you feed him for a lifetime”.

David Malpass, the new president of the World Bank, is a big proponent of this notion. In order to achieve the purposes of the World Bank, eradicating poverty and reducing inequalities, he believes in supporting policies that promote economic growth in developing countries, as he wrote in his article “structural changes to increase median income”, published in the Financial Times.

Lant Pritchett of Harvard University, cites the example of the Council for Research on International Economic Relations, based in Delhi, India, which helped the Indian government to implement liberal policies that favor economic progress. Said institute received 900,000 dollars from the U.S. Ford Foundation for its foundation. Mr. Pritchett has calculated the benefit of the reforms in the Indian Economy promoted by the Institute to 4 billion dollars, a 20,000 return on the initial amount.

The implementation of structural changes that favor economic growth on the one hand will provide long term benefits to the huge populations of countries like India and Pakistan and on the other hand will set an apt example for other similar countries like Nigeria and other sub-Saharan Africa countries. 

Nevertheless, the World Bank faces great difficulty to influence the national governments of said countries, especially towards the direction of structural changes. Therefore, it is limited in financial aid schemes, such as mass vaccinations, for the weakest and most vulnerable population groups. However, such subsidy policies, despite offering temporary relief, are not headed to the right direction.

In 2018 8.5% of the world’s population was living under the poverty line, whereas the Bank’s target is to decrease this percentage to 3% by 2030. In order to achieve this goal, the World Bank must change direction and support research centers and financial institutions in these countries, which will play a key role in shaping polices that promote long term economic growth and prosperity.