MANILA, Philippines – The Aquino administration’s policies are aligned with the World Bank’s twin goals of ending extreme poverty and promoting shared prosperity, Axel van Trotsenburg of the World Bank said in a live studio interview with Rappler.
“There is a wonderful convergence of a national plan within what is happening in the World Bank… Similar goals are being pursued by President Aquino,” he explained to Rappler on Friday, July 12.
The World Bank (WB) targets to eliminate extreme poverty by 2030. In 17 years, those living with less than US$1.75 a day should only be 3% or lower.
Van Trotsenburg is the vice president of the WB East Asia and Pacific region. He said that pursuing the twin goals will require not only government action but also collaboration from the private sector and international community.
“People should rally to get that support internally,” he said, explaining that a vigilant public can make government more aware of its “social contract” to reduce poverty.
While challenges remain, van Trotsenburg said a commitment from President Benigno Aquino III is a good indicator that growth and poverty alleviation is not only a quarterly objective but a long-term goal.
“The point of departure is really vision and commitment…If you see strong signals that there is political willingness to fight poverty, that is good news,” he said.
He added that strong political will can help gain investor attention.
Van Trotsenburg said during his interview with Rappler that the Philippines is “joining the league” of rapidly rising economies in East Asia, alongside Indonesia and Vietnam.
He said the Philippines’ 6.6% growth rate in 2012 is “respectable” amidst a “difficult environment” in the world economy, pertaining to the aftermath of the 2008 global recession.
“The Philippines is not working in isolation,” he said. “When President Aquino took over, [we were] still in the midst of an international financial crisis. You see that the richer countries are still having struggles. Some of the European countries are in and out of recession. The international environment hasn’t been easy.”
The Philippines’ high growth is part of a larger trend, which van Trotsenburg pertained to as “seismic shifts in the world economy.”
“The center of economic gravity is moving towards Asia. Over the last couple of years, 40% and at times 50% of world economic growth was generated here in East Asia,” explained van Trotsenburg.
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Van Trotsenburg, however, pushed for cautious optimism in viewing economic growth. The challenge, he said, is for growth to be inclusive such that prosperity is shared even to the poorest 40% of the country.
He explained that growth is an essential but not sufficient condition of poverty-reduction.
“Turning high growth into inclusive growth is increasingly important for the Philippines, by deepening and accelerating reforms that will create better and more jobs,” he explained.
“What are we going to do to give a helping hand to the millions of absolute poor?” he asked.
He cited the World Bank’s principle of providing equal opportunity and empowering citizens from the poorest of the poor to have a fighting chance in the labor market.
If and when poverty is reduced, the next challenge is to eliminate extreme poverty – an ambitious goal but a necessary one.
“The next challenge is that we can eliminate extreme poverty. We think that it is realistic. It is an ambitious goal. But without ambition, you will not change the world,” he said.
“We think it is within reach. We have made as a world community enormous progress over the last decade. Great progress have been made in Asia,” he added.
Van Trotsenburg echoed calls from the WB President Jim Yong Kim, pressing the international community to join in its anti-poverty crusade.
“Any society can always do better. I think we should always keep in mind that you should not leave your neighbor behind when that person is living in poverty,” he said.
In a meeting with the Philippine president and his economic advisors on Friday, July 12, van Trotsenburg praised the administration for its “sound macroeconomic management” and the robust growth it has achieved.
On the same day, the World Bank extended $30 million in budgetary assistance as part of a development policy loan (DPL). DPL is one of the two basic lending instruments of WB, which involves external financing to support a government’s policy and institutional reforms.
WB has committed continued support to government programs such as job creation, the conditional cash transfer scheme, social service delivery, comprehensive infrastructure development, and climate change and disaster impact mitigation.
Finance Secretary Cesar Purisma said the World Bank is a “crucial partner” in promoting empowered and empowering growth.
“Their contributions to our infrastructure plan bode well for inclusive growth and a more dynamic business environment,” he said. – Rappler.com