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World Bank Calls On Global Communit



Subject: World Bank Calls On Global Community to Support Development for the Poor

15 September 1999 

World Bank Calls On Global Community to Support Development for the Poor 
(Bank issues "World Development Report 1999/2000")  (930)
By Eric Green
USIA Staff Writer

Washington -- The international community should renew its commitment
to support development efforts, particularly for urban areas that are
drawing growing numbers of the world's poor, says the World Bank's
Chief Economist and Senior Vice President Joseph Stiglitz.

The World Bank's new 300-page report, "Entering the 21st Century:
World Development Report 1999/2000," warns that while the needs of the
world's poorest are increasing, available development funds continue
to drop, Stiglitz said during a September 15 news conference.

He told reporters that the total number of people living on less than
$1 a day has risen in Latin America, South Asia, Sub-Saharan Africa,
Eastern Europe, Central Asia, the Middle East, and North Africa.

Many cities in developing countries are having difficulty coping with
surging populations. About 220 million urban dwellers -- 13 percent of
the developing world's urban population -- lack access to safe
drinking water, and about twice this number lack access to even the
simplest of latrines. In Bangladesh, for example, the Bank estimates
that over 60 percent of city residents face serious shortages of
housing and basic amenities.

One success story, Stiglitz said, is the East Asia region, which
"provides some notable lessons in successful development strategies."
All East Asian countries have shown a much higher rate of savings than
other developing countries. Between 1990 and 1997, Stiglitz said, the
overall gross domestic savings in the countries of East Asia and the
Pacific was 36 percent of Gross Domestic Product (GDP), compared to 20
percent of GDP in Latin America and the Caribbean, and 17 percent of
GDP in Sub-Saharan Africa.

East Asia has also been successful in reducing poverty, Stiglitz said.
Roughly six of 10 East Asians were living in poverty in 1975, while in
1995 that number had dropped to two of every 10 persons.

Stiglitz emphasized that although technology may allow the rich to
keep themselves "sequestered" from the poor, the rich "cannot
completely isolate themselves." Crime and kidnapping affect the rich,
he pointed out, "and to the extent that the quality of life for the
general population does not improve, and services are not extended,"
the rich cannot escape such problems. Stiglitz pointed to Manila and
Taipei as examples of cities in which the rich are severely affected
"by the squalor and unrest in the city in which they live."

Regarding international trade, the Bank reported that global trade
flows are penetrating deeper into the workings of developing
economies, particularly affecting income distribution, employment
practices and productivity growth. Trade in goods and services has
grown twice as fast as GDP in the 1990s and the share attributable to
developing countries has climbed from 23 to 29 percent.

The report said that while the 1990s saw "impressive progress in
liberalizing trade regimes, sustaining that momentum over the next 25
years will be more difficult." The "Millennium Round" of trade
negotiations, beginning in November 1999, "will provide the
international community with an opportunity to meet the challenge,"
the Bank suggested.

The report also predicted that the twin forces of localization and
globalization will shape the future of the world economy. Localization
-- the growing economic and political power of cities, provinces and
other sub-national entities -- and the accelerating globalization of
the world economy could "revolutionize prospects for human development
or it could lead to chaos and increased human suffering."

Improved communications, transportation, and falling trade barriers,
"are not only making the world smaller they are also fueling the
desire and providing the means for local communities to shape their
own future. Faced with popular demands for greater self-determination,
national governments from Africa to Latin America, and from Europe to
Southeast Asia are devolving power to the local level -- with mixed
results," according to the report.

Stiglitz, who oversaw the preparation of the report, said
globalization is "like a giant wave that can either capsize nations or
carry them forward. Successful localization creates a situation where
local entities and other groups in society -- the crew of the boat, if
you will -- are free to exercise individual autonomy but also have
incentives to work together."

The report said that effective decentralization can result in more
responsive and efficient local governments. For example, in parts of
Latin America, responsibility for public services such as education,
health, local roads, and water supply and sanitation have been placed
in the hands of semi-autonomous sub-national governments. In Colombia
and Argentina, primary education has been decentralized to the
intermediate levels of government, while in Chile it has been
transferred to municipalities. Major increases in fiscal transfers to
sub-national governments have also occurred, particularly in Brazil,
Mexico, and Colombia.

The first half of the report focuses on three areas in which global
cooperation is becoming ever more crucial: trade, financial flows, and
environmental issues such as bio-diversity and climate change.
Stiglitz said, for instance, that for most children in developing
countries, breathing the air in cities may be as harmful as smoking
two packs of cigarettes a day. The report noted that in the city of
Delhi, one out of 10 children aged 5 to 16 suffers from bronchial
asthma, which is caused in part by air pollution.