We are at an auspicious moment in history. Thanks to the successes of the past few decades and a favorable economic outlook, developing countries now have an unprecedented opportunity: the chance to end extreme poverty within a generation.
This opportunity must not be squandered.
Earlier this year, we in the World Bank Group set two specific and measurable goals for ourselves and our partners in the development community: effectively ending extreme poverty by shrinking the share of people living on less than $1.25 a day to 3 percent by 2030, and promoting shared prosperity by raising the incomes of the poorest 40 percent of the population in every developing country.
These are ambitious goals, and success is far from inevitable. Nearly five years after the global financial crisis began, in 2008, the world’s economic recovery remains fragile. Developed countries struggle with high unemployment and weak economic growth. Developing countries are growing more slowly than before the crisis. Moreover, the fight against poverty will become increasingly difficult as we push toward our target, since those who remain poor will be the hardest to reach.
Other challenges could pose new threats to poverty reduction. Conflict and political instability present major risks, because they increase poverty and create long-term obstacles to development. Moreover, a warming planet could increase the prevalence and size of drought-affected areas, and make extreme weather events more frequent, with unpredictable costs in terms of lives and financial resources.
Yet, I remain optimistic that achieving the goals is within our reach. Doing so will require systemic and relentless collaboration from the World Bank Group, our 188 member countries, and other partners.
IFC will play an important role by mobilizing the power of the private sector to create jobs and opportunity where they are needed most.
This year, IFC provided a record of nearly $25 billion in financing for private sector development, $6.5 billion of which was mobilized from investment partners. Nearly half of IFC’s 612 investment projects took place in the poorest countries served by the International Development Association. More than $5 billion went to support private sector development in Sub-Saharan Africa, and more than $2 billion went to South Asia.
IFC Asset Management Company, an IFC subsidiary that mobilizes capital from third-party investors for investment in developing countries, increased its assets under management to $5.5 billion. This represents a significant milestone for a company set up just four years ago. In addition, IFC mobilized more than $3 billion from other investors in the form of syndicated loans.
This Annual Report shows the crucial role IFC has played in providing support for small and medium entrepreneurs, expanding access to finance for the poor, creating jobs, and generating opportunities for women.
In Côte d’Ivoire, for example, IFC arranged a financing package that will allow the Azito power plant to increase energy production by 50 percent without using additional gas. This will help reduce power shortages in the country and support its economic recovery. In Latin America, IFC is extending quality healthcare to poor communities in the Brazilian state of Bahia with a highly innovative public-private partnership model. And, working under a joint strategy with the World Bank, IFC is bringing new opportunity to Myanmar, a country whose economic development has lagged significantly behind that of its East Asian counterparts.
IFC is also making important strides in helping the private sector address climate change. Earlier in 2013, IFC issued the world’s largest “green” bond, raising $1 billion that will be directed to climate-related projects across the globe. In addition, IFC helped over 10 building developers in Asia, Latin America, and other regions adopt more energy-efficient designs. These are the types of steps we must take to ensure that climate change does not wipe out the hard-won development gains the world has achieved in recent decades.
JIM YONG KIM
World Bank Group President