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The 2022 Annual Meetings of the IMF and the World Bank, held in person for the first time in three years, marked a significant collaboration among the most influential global leaders. Many leaders came together to discuss the world’s most concerning issues, and “poverty” was among the most significant.
GLOBAL POVERTY
A two-year report by the World Bank on global poverty reveals that 70 million more people are on the verge of poverty. The report also indicates that there is a 4 percent reduction in global median income. These statistics illustrate the difficulty of our collective efforts to achieve shared prosperity. In fact, the reverse of shared prosperity has been occurring throughout. One example is the imbalance in the flow of global capital, which is dominated by advanced economies. This is evidenced by fiscal deficits, heavy borrowing by large corporations, and central banks purchasing only the bonds of the most developed nations in many countries. Additionally, citizens' personal development and well-being are hampered in less-developed countries due to a variety of issues, including education, energy, and food shortages.
AN ARRAY OF SOLUTIONS
Several World Bank sessions have cited Senegal as a case study of poverty alleviation in Africa. The first solution was local funding; this year, the World Bank sent approximately 43 billion CFA francs (the currency of the Financial Community of Africa) to help subsidize the cost of living for locals. The second set of measures focused on bolstering pharmaceutical and health sovereignty. Currently, Senegal is one of the hubs in West Africa that houses a plant for producing COVID-19 and other vaccines, such as those for yellow fever. The third series of measures involved increasing agricultural sector investments to improve food security and financial independence. With the assistance of the World Bank, Senegal’s agriculture budget between 2020 and 2022 has increased by more than 20%. Finally, there were efforts to close the infrastructure gap, especially in logistics, such as investments in an express regional train service and an extended road network, resulting in the country now boasting 189 new highways.
OPPORTUNITIES FOR BUSINESSES
This multi-pronged scheme is beneficial not only for Senegalese but also for businesses. To implement these regional development projects, the World Bank has advocated for creating various Public-Private Partnerships (PPPs). In this model, local governments receive capital from the World Bank (or other international benefactors), then distribute it to public sectors with the right know-hows via various means, including low-interest loans, grants, and funding. In addition to their regular business plans, global and local companies operating or wishing to operate in Senegal should therefore develop a strategy to improve the country's basic infrastructure. This will enable businesses to strengthen their relationships with the public sector while also benefiting the community in which they operate. The improvement in the community can then return to benefit companies by providing more sustainable resources, a higher quality of labor, and an increase in economic activities, all of which lead to even more sales—a very model of "inclusive development.”
Poverty is one of the most pressing problems in the world and requires immediate attention. As the Managing Director of the IMF, Kristalina Georgieva, stated in the meeting, "We need to have an action that is on par with the size of the problem." With knowledge, adequate funding, and public-private partnerships (PPPs), tangible changes that benefit all members of society become possible.
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