Distribution policy was at the top of Mr Holmås’s agenda when he took part in this year’s World Bank–IMF Spring Meeting in Washington D.C. last week. While the World Bank envisaged a slight drop in economic growth in the eurozone in 2013, growth in development countries is estimated at 5.5 % with a slight additional increase forecast for the next two years.
“Growth is important, but growth in itself does not even out disparities between rich and poor. It is therefore important that the World Bank – like Norway – considers growth in the context of fair distribution. We want to be at the forefront of an international cooperation working to ensure that economic development also benefits the world’s poor,” said Mr Holmås.
In his opening address, President of the World Bank Jim Yong Kim said that the Bank would take a two-pronged approach:
“The first is virtually ending extreme poverty by 2030. The second is promoting shared prosperity by fostering income growth of the bottom 40 % of the population in every country. And for that second goal, we also mean sharing prosperity across generations, and that calls for bold action on climate change,” he said.
Mr Holmås called the World Bank’s new approach a quantum leap for international distribution policy and indicated that Norway may increase its funding to the Bank’s International Development Association (IDA).
“We will now consider increasing Norway’s contribution to the IDA. The World Bank has committed itself to working to ensure that the poorest too can benefit from economic growth. Over the next five to six months, the Bank will work out in more detail how it intends to reduce the gap between rich and poor – a discussion that Norway will take active part in,” said Mr Holmås.
Christine Lagarde, Managing Director of the IMF, also put the distribution agenda on the map. In her remarkable address to many of the world’s finance ministers attending the Spring Meeting, she said that the IMF would promote distribution between rich and poor within countries. This is a new signal from the multilateral financial institutions. Norway’s emphasis on the inclusion of taxation in development policy also won support from Ms Lagarde. She said that the IMF would promote more taxation, less general subsidies and better targeted economic support for the poor.
The fight against tax havens
In a separate meeting with Dr Kim, Mr Holmås presented the Norwegian Government’s white paper on fair distribution which has much in common with the President’s focus on shared prosperity.
“We discussed measures to combat illicit financial flows. I am pleased that Dr Kim gave such clear signals that the Bank intends to address this huge problem. Illicit financial flows are impeding development in poor societies, as huge potential tax revenues are being hidden away in tax havens,” said Mr Holmås.
Close links between climate change and poverty
Access to clean energy was another key topic at the Spring Meeting. There was broad agreement that climate change is a major threat against poverty reduction, and that these agendas must be seen in the light of each other.
At a ministerial meeting on sustainable development that was led by World Bank President Kim and UN Secretary-General Ban Ki-moon, Mr Holmås gave his full support for the Bank’s new climate change initiatives. He highlighted its efforts in the field of climate-smart agriculture, which will include measures to prevent deforestation, and expressed his support for measures to reduce fossil fuel subsidies in situations where a social security net is already in place.
Women’s rights, gender equality and education were also high up on the Norwegian delegation’s agenda. Mr Holmås’ address at the Equal Futures Partnership event emphasised women’s economic and political rights. At a high-level meeting on education, Mr Holmås stressed the importance of higher levels of investment in the education sector. He pointed out the need for stronger political will to ensure education for the millions of children who grow up without proper schooling or any schooling at all.
“Norway will continue to support the Education for All agenda. We attach particular importance to primary education and girls’ access to education. Other high priority areas are marginalised groups and education in conflict areas,” said Mr Holmås.