ISTANBUL, (Reuters) – Making juice from their own fruit crops or polishing gemstones from their mines would help the world’s least developed countries diversify their economies and reduce poverty, a senior World Bank official said yesterday.
“Just producing crops is not enough. You need to process the product you produce and create jobs,” World Bank Managing Director Ngozi Okonjo-Iweala said in an interview ahead of a five-day U.N. conference in Istanbul.
The conference aims to work out a support programme for the world’s 48 poorest nations, which have a combined population of 885 million, 75 percent of whom live on less than $2 a day.
Many countries are seen as too dependent on commodities exports and unable to use economic growth to cut poverty.
Okonjo-Iweala said Botswana, which is creating facilities to polish and shape its gemstones, and Ethiopia and Rwanda, which are processing their own coffee crop, were positive examples of countries adding value to their commodities.
“Ethiopia has a commodities exchange where you can trade, which helps farmers. They can also put their products in a warehouse, get warehouse receipts and then use these as collateral on a loan.”
The former finance minister of Nigeria urged poor states to cut red tape, focus on delivering services, empower the private sector and improve living standards.
The World Bank has just raised $49 billion for the next three years to support the 79 poorest countries in the world. A particular focus would be on post-conflict countries she said, which need strong support to avoid recurring violence.
“If you don’t support these countries then some of them may slide back. We need to consider how you help them stimulate economic activity, create jobs for youth who have been involved in this conflict, and focus on improving their lives,” Okonjo-Iweala said.
Only three small nations — Botswana, Cape Verde and Maldives had developed enough to escape the impoverished grouping since the United Nations created it decades ago.
Criteria for inclusion on the list include having a per capita national income of less than $905 per year, high child mortality, low access to education, and food and economic insecurity.
