World Bank must lead harder strike at poverty

The IMF-World Bank annual meetings in Tokyo provide the new World Bank chief, Jim Yong Kim, with an opportunity to signal the institution's goals. With 1.3 billion people worldwide still living on less than US$1.25 a day, the aim should be to end poverty - but with a difference. Economic growth remains the way to lift millions out of poverty, but high growth cannot last unless we confront environmental and social ills.

Much of the credit for poverty reduction in the past decade goes to economic expansion in China and elsewhere. But growing first and cleaning up later will no longer work as water scarcity, forest loss, climate change and income disparities threaten to scuttle lasting growth.

The premise has been that growth is driven by investment in physical capital, such as building roads. Investment in human capital, such as improving health care, has now been recognised as a growth engine too. But investment in natural capital, such as abating water pollution, has received short shrift. Like the three wheels of a tricycle, all three forms of capital are essential.

The approach needs to be built on three pillars. First, we need greater environmental sustainability by lessening resource losses and our carbon footprint. Some 1.2 billion people live in water-scarce regions. More than 1 billion depend on forests, while deforestation threatens livelihoods. Floods and droughts are exacting a toll.