IMF Senior Official: Eradicating Poverty Is Achievable, Political Will Is a Factor

Sean Nolan, Deputy Director, Strategy, Policy, and Review Department, IMF, Flicker

Washington- The International Monetary Fund recently released a report with an evaluation on social security programs covering the poor and underprivileged in low-income countries, given that that part of the population tends to suffer most from economic reform and austerity measures.

The Washington-based organization said that it provides major support for countries with little sources of income, such as zero interest rates on all fund concessional facilities and extended grace periods.

At least 43 member states have benefited from eased IMF programs that are aimed at tackling worldwide poverty and helping countries achieve a stable and sustainable economy.

Poverty Reduction Strategies (PRS) are central to IMF-supported economic and financial programs in low-income countries. PRS documents assess poverty challenges, describe how macroeconomic, structural, and social policies and programs can promote growth and reduce poverty, and outline external financing needs and the associated sources of financing.

They are prepared by governments in low-income countries generally through a participatory process involving domestic stakeholders and external development partners.

Laying out what are the makings of a good social security program, the report reviews and assesses the means on introducing improvements to effective programs. It also highlights the need for outlining clear economic targets.

For better results, the report recommends cooperation between governments and developing partners to solidifying progress.

The report focuses on low-income countries, which are labeled as such by conditions stipulated by the World Bank, IMF Strategy, Policy and Review Deputy Sean Nolan told Asharq Al-Awsat.

Low-income countries are those with an “average annual income per capita at $ 2,500,” and these rates are registered in “African and Southeast Asian countries such as Vietnam, Cambodia, and Bangladesh, as well as some countries in the Middle East, such as Yemen and Sudan.”

People left behind by struggling economies are usually looked out for by social spending and saving programs—social spending, or social security, focuses on providing affordable healthcare and education.

“In some cases, national programs tasked with poverty reduction seek to pump expenditures into social programs because of higher spending generally supported by domestic revenue, grants or debt financing,” said Nolan.

“In other cases, the objective is to protect defenseless groups from negative effects subsequent to fiscal adjustment and economic reform procedures—it is sometimes done through undertaking compensative measures at the policy level to strengthen social security.”

The senior strategist said that the report shows programs endorsed by the IMF in underdeveloped countries to have registered medium-level growth, with success rates for social programs seeing two-thirds of goals being achieved in 90 percent of supported initiatives.

Most IMF programs aim to balance the budget deficit and make sure that it does not step over a certain limit, but that does not necessarily mean a cutback to education and health sectors.

“At least 90 percent of the United Nations Population Fund (UNFPA) programs for low-income countries are aimed at strengthening the education and health sectors,” said Nolan.

As to whether ending poverty being a surmountable hurdle, Nolan sheds light on the multi-lateral action being carried out across the world, saying that “one of the United Nations’ Millennium Development Goals (MDGs) and the goals of Sustainable Development Goals (SDGs) is to eradicate poverty by 2030, which also happens to be one of the World Bank’s main objectives.”

“I think the answer is yes. The goal of eradicating poverty can be achieved.”

Although eliminating poverty is not the impossible per se, Nolan focuses on the steps needed to do so- underscoring the need for funds.

“We need to consider the amount of funds needed to achieve this goal across countries. This is not a huge amount, but the challenge is to secure and employ it efficiently– political will plays a major role next to the availability of support and foreign aid.”

‘European Development Days’ Forum Kicks Off in Brussels

Brussels – The 11th edition of European Development Days kicks off on Wednesday in Brussels, with a special focus on investing in development.

The event is expected to gather around 7,000 participants and will discuss challenges facing the world, as well as various approaches to dealing with such challenges.

European Commission President Jean-Claude Juncker said on the eve of the event: “Europe is the smallest continent, but it is also the richest. And as the richest, we have to help others not so fortunate in the lottery of birth to catch up.”

“Development aid is a word of the past. It is about partnership, not aid. And it is time we invested more in that partnership,” he added.

The European Development Days will witness the signature of the European Consensus on Development, a strategic document that outlines the future of European development policy.

For the first time, the Consensus will apply in its entirety to all EU institutions and all member states, who are committed to work more closely together.

The forum in Brussels will bring together heads of state or government and business leaders to discuss and share visions on sustainability, inclusivity, peace and prosperity, while focusing on the roles of youth, women and the private sector in development cooperation.

Among the high level speakers of the event are Deputy Secretary General of the United Nations Amina Mohammed, Managing Director of the International Monetary Fund Christine Lagarde and EU High Representative and Vice President Federica Mogherini.

Few days ahead of the forum, the European parliament voted in favor of the new Consensus on Development in a resolution adopted by 405 votes to 70, with 159 abstentions.

The consensus aims to unite the global Sustainable Development Goals with the EU’s development policy.

Mohieldin: IT Offers Major Opportunities to Promote Arab Economies

Mahmoud Mohieldin, World Bank Group Senior Vice President for the 2030 Development Agenda, United Nations Relations, and Partnerships

Washington – World Bank Senior Official Mahmoud Mohieldin said that Arab countries could benefit from major economic opportunities by depending on their human resources, especially in the field of Information Technology.

In an interview with Asharq al-Awsat newspaper, Mohieldin said that despite slow growth witnessed in the Middle East in 2017 due to conflicts and fall in oil prices, Arab States could still take advantage of opportunities in the IT sector, as the most traded and most needed product in the economies of the 21st century.

Mohieldin is the World Bank Group Senior Vice President for the 2030 Development Agenda, United Nations Relations, and Partnerships.

He told Asharq al-Awsat about the new international trends to benefit from Financial Technology, know as FinTech and considered as a new technology platform for financial transactions.

The official also talked about the ongoing Spring meetings of the International Monetary Fund (IMF) and the World Bank in Washington, and progress achieved in the implementation of the UN Sustainable Development Goals (SDGs), as well as efforts deployed by Saudi Arabia, Egypt, Morocco and other countries in promoting development.

On challenges facing the Middle East, Mohieldin said that internal conflicts, slow investments and the decrease in oil prices have affected the countries’ gross national income (GNI) and growth rates.

“Our estimates indicate that the growth rate in the Middle East and North Africa region would reach 2.6 percent in 2017, compared to 3.5 percent last year,” he stated.

“While the current situation does not indicate any improvement, we have hopes that finding a solution to the Syrian crisis, ending the war in Yemen, and restoring peace in Libya would positively influence those countries and the whole region,” Mohieldin added.

“Growth in the region depends on security stability, the implementation of economic reforms and investments in building and reconstruction,” the official noted.

Asked about solutions to promote economic performance in the region, especially in the Gulf, Mohieldin said: “The economies of the 21st century require innovative solutions in the wake of technological progress.”

He noted that Arab countries should rely more on their young population and seek to diversify their income by promoting the use of IT.

Mohieldin underlined the importance of FinTech, which he said was at the core of the evolution of banks and financial institutions.

He added that the new technology would allow countries to overcome development challenges, by making widespread access to financial services possible, while preserving the privacy of financial transactions.

The implementation of the Sustainable Development Goals (SDGs) is another important topic of discussion during the IMF and World Bank Spring meetings.

“While it is still early to evaluate the progress achieved over the past two years, there are some indications that a number of countries have taken measures in this regard,” he stated, commenting on the implementation of the SDGs since their adoption in September 2015.

“The performance of Arab States (with regards to the SDGs) was deceiving in some countries and good in other countries, especially in the field of basic education,” he said.