Transcript of the Development Committee Press Briefing

IMF News, April 20, 2013

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Global target endorsed to reduce the extreme poverty rate (the number of people living on less than $1.25 a day) to 3 percent by 2030.
Dr. Kim: "We are no longer dreaming of a world free of poverty, we have set an expiration date for extreme poverty."
Time horizon emphasized: "The target of 2030 is closer than you think, just 17 years away."
Annual country-by-country reporting commitments: report on the rate of extreme poverty and changes in the income of the bottom 40 percent in each country to track progress and vulnerable people slipping back into poverty.

Second endorsed goal: promote shared prosperity by fostering income growth of the bottom 40 percent of the population in every country.
Shared prosperity entails:
- Creating opportunities for all citizens.
- Promoting gender equality.
- Focusing on those who, although not currently poor, are vulnerable to falling into poverty.

World Bank Group strategy to be unified around the two goals and considered again at the Annual Meetings.
Specific operational emphases described by Dr. Kim:
- Priority focus on South Asia and Sub-Saharan Africa.
- Country strategy example: India strategy built around ending poverty and building shared prosperity, increasing investment to the poorest states.
- Work in fragile and conflict-affected states (e.g., Great Lakes Region) linking political, security and economic development solutions.
- Concern and active engagement in Caribbean countries (Jamaica program cited).

IMF actions described by Ms. Lagarde:
- Improving lending facilities to low-income countries (approved about a month ago).
- Providing increased and more focused support to small states.
- Developing capacity building, noting low-income and emerging and developing countries are the biggest consumers of IMF capacity services.
Four policy support areas IMF will actively support:
- Managing natural resources better to avoid traps for resource-rich economies.
- Giving policy advice on job-friendly, inclusive growth, with attention to women.
- Technical advice on development of financial sectors to absorb capital flows.
- Continued work on subsidies related to climate change and state revenue.

Dr. Kim highlighted climate change: "we need a plan that is equal to the challenge of a disastrously warming planet."
Investment in people emphasized as both moral and strategic:
- Universal access to education and improved learning outcomes.
- Building health care systems that provide quality care to all people.
Ms. Lagarde noted these issues are critical to finance ministers and central bank governors as well as development ministers.

Development Committee called for robust replenishment of IDA, with strong participation from all members (welcomed by Dr. Kim).

Land and land-grab concerns:
- Dr. Kim stated the World Bank is "very expressly and on record as being against speculative land-grab kinds of situations" and monitors its portfolio.
Corruption and accountability:
- World Bank policy of zero tolerance for corruption; recent debarment example: a company debarred and barred from participating in World Bank-funded projects for ten years.
- Support for biometric and electronic payment systems in India cited as a tool to reduce leakages and improve delivery of benefits.
Small and indebted states (Caribbean):
- Acknowledged classification issues (middle-income/high-income labels vs. high public debt) and the need for tailored support.
- Commitment to not forget smaller countries even when global poverty rates decline (pointing to high poverty in fragile and conflict-affected states "in the 30 and 40 percent region").

South Asia and Sub-Saharan Africa:
- Emphasis on job creation, addressing large states and fragile/conflict-affected countries, and scaling up energy investments to support growth.
Egypt:
- Support envisaged for removing fossil fuel subsidies paired with targeted social protection to protect the poorest; involvement contingent on country agreements (standby agreement referenced).
- Mention of local expertise in Egypt (Smart Card system) and potential packaging of local and international expertise (World Bank/IMF) to implement targeted subsidy systems.
North Africa and Tunisia:
- Need to promote private sector investment, rebuild trust, create fair and enforced rules, and improve the business climate.
- Disturbing fact cited for Tunisia: "the highest rates of unemployment are among the college-educated."
Libya and Syria:
- IMF provides technical assistance and capacity building in Libya; Syria described as a "much more complicated and much more unsettled situation."

Shared challenges across advanced and developing economies:
- Two cross-cutting tasks for all countries: rationalize public expenditures using evidence and improve the business climate while investing in infrastructure and human capital for medium- and long-term growth.
- Ms. Lagarde highlighted female labor force participation and the informal job market as issues that span advanced and low-income countries, affecting revenue and labor market outcomes.
- Comparative note: unemployment concerns can be similar across contexts (example: Spain and some MENA transition countries).

Transcript of the Development Committee Press Briefing — April 20, 2013