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Last Updated: Sunday, 13 April, 2003, 21:48 GMT 22:48 UK
World Bank warns on poverty

By Steve Schifferes
BBC News Online at the IMF/World Bank meeting in Washington

The World Bank says the millennium development goals will not be met without additional aid and warns that absolute poverty will increase in Africa.

James Wolfensohn
Wolfensohn: war on poverty continues
The head of the World Bank, James Wolfensohn, says he is worried that while attention is focused on Iraq, the "other war" against global poverty will be ignored.

The Bank projects that the number of people living in absolute poverty will only decline slowly in the next 15 years, with 800 million having an income of below $1 per day in 2015, compared to 1.1bn in 1999.

But in sub-Saharan Africa, the numbers in poverty will rise from 315m to 404m in the same period, making it the region with the most poor people.

People in Extreme Poverty
East Asia 1999: 279m
2015: 80m
South Asia 1999: 488m
2015: 264m
Africa 1999: 315m
2015: 404m
Latin America: 1999 57m
2015: 47m
Income below $1 per day
source: World Bank
Eric Swanson, one of the authors of the report, has told BBC News Online that the main reason is that economic growth in Africa is expected to be much weaker over the period than in other developing countries.

It is due to average just 1.6% per capita compared to 3.5% per capita in the rest of the developing world in the decade leading up to 2015.

But he said that African countries were also less efficient at translating economic growth into poverty reduction, whether through poor governance, lop-sided income distribution or the prevalence of war and conflict.

However, he says that a major liberalisation of agricultural trade could reduce global poverty by another 300m by 2015.

So far, trade talks aimed at opening up rich countries' agricultural markets are stalled ahead of a major trade meeting in Cancun, Mexico, in September.

Health and education for all

The millennium development goals set targets for improving child and maternal health, making sure every child has a primary education and improving water and sanitation.

But the Bank says that these targets will not be met by economic growth alone, even if developing countries increase their own budgets.

Extra Aid Needed Each Year
Education: $8bn - $10bn
Health: $15bn - $30bn
Water: $12bn - $25bn
Total: $35bn - $65bn
source: World Bank
Mr Swanson told the BBC that $35bn to $65bn annually was needed in extra aid from rich countries, roughly doubling the current amount of development aid.

Gordon Brown, the UK finance minister, has proposed raising this sum by creating an "international financing facility", through which rich countries could increase the amount of aid by borrowing extra funds from private capital markets.

He is hoping that the proposal will be considered at a summit of G7 leaders in Evian, France, in June.

Military burden

Mr Swanson said that military spending by developing countries was a significant burden that made it more difficult for them to improve health and education.

The average poor country spends 2.3% of its GDP on defence, twice as much as it allocates from the public purse to health care.

Health and education spending
Africa health: $29
primary education: $48
South Asia health: $21
primary education: $38
East Asia health: $44
primary education $127
Rich countries health: $2,736
primary education: $4,088
health: spending per person
education: spending per pupil
Source: World Bank, 2000
In terms of per capita spending, the disparities between rich and poor countries are vast, with rich countries spending up to 100 times more per person on health and education than in the poorest regions.

The United States alone spends $1.3 trillion yearly on health, compared to $45bn for all low-income countries.

Rich countries spend 10% of their GDP on health, compared to 4% in poor countries.

And 73% of health spending in poor countries is through the private sector, compared to just 38% in rich countries as a whole (although more than half in the United States).

Iraq 'distracts from aid priorities'
13 Apr 03  |  Middle East

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