'World Bank talk on poverty, climate change – convenient substitute for real action’

'World Bank talk on poverty, climate change – convenient substitute for real action’
The World Bank’s talk about climate change and obliterating poverty doesn’t change the fundamental picture; the outrageous degree of inequality must be stopped, says Richard Wolff, economist, author of Democracy at Work: A Cure for Capitalism.

A new report by the World Bank warns that climate change may drive over 100 million people into poverty by 2030. It states that rising temperatures and natural disasters caused by climate change are among the main threats to poor communities.

RT: The World Bank has been criticized for launching programs that worsen countries' economic situations and now the organization is attempting to distance itself from the criticism by publishing its attempts to find solutions to extreme poverty. Will this work?

Richard Wolff: Not unless they make drastic changes. In the past, the World Bank has been a supremely conservative force working closely together with existing governments in most of the countries of the world  and doing very little to disturb the status quo in these countries, except occasionally making them follow neo-liberal kinds of economic programs. The fact that it has not worked - that the gap between rich and poor in the world has got worse - hasn’t changed their basic behavior. And unless we can see real dramatic shifts in how they understand their role, who they help, what parts of the society they insist upon lifting up, unless we see that - there is no reason to believe that they are going to do anything different in future than what they have done in the past. 

RT: The World Bank has linked extreme poverty to climate change and claims to have an ability to end poverty. Why are they linking climate change to this?

RW: It is a bit of a mystery. The only thing we can think of is that climate change has become a big issue in the world. There again, it should have been taken up years ago. The US - which is the strongest influence on the World Bank - has been hesitant to do much about it; so, the World Bank hasn’t done much about it. This seems to me to be again an effort to do something that may be popular, that will maybe get them some good reviews in the newspaper. But it doesn’t change the basic question of the existing economic systems in the world that are producing growing inequality - and that is what has to be addressed. Let me give you an example: we just heard a few weeks ago that we have crossed a milestone in the world; that the richest one percent of the people of the world now own over half of the liquid wealth of the world. That is a fundamentally outrageous degree of inequality. The first thing the World Bank should do is declare that that is fundamentally unacceptable and come up with policies that stop this kind of unequal distribution of the world’s wealth. Otherwise, the talk about climate change and obliterating poverty is just that – talk and it doesn’t change the fundamental picture.

RT: Is this action a sincere move to help poor people or just a step to show people the World Bank is not as bad as many think?

RW: I think as usual it is to substitute the appearance of concern and the appearance of action for reality. I think the World Bank has, like the IMF, a bad reputation for having come for most countries problems with too little, too late. In many cases by means of their austerity programs and their neo-liberal structural adjustment programs actually making the conditions worse. A few of the leaders of the IMF and of the World Bank such as Madam [Christine] Lagarde now and Joseph Stiglitz a while ago have understood - again little and late - that reality: therefore, there has to be a fundamental change. They are not ready to do that. So, being concerned about climate change is a convenient but tragic substitute for real action.

RT: Do you think this action will change people's opinion of the organization?

RW: No, I think that the World Bank and the IMF are going to have to do major changes and there is little sign of them being inclined to do it in order to change their reputation. They are part of the old system – the traditional system dominated by the US and with its allies in Europe and Japan. They are responsible for the condition of the world economy: both the growth of inequality and the crisis ever since 2008. They are going to have a bad reputation until they fundamentally change what they are doing. And I doubt that that will happen short of political upheaval in the world - and that’s what I think where we are going.

The statements, views and opinions expressed in this column are solely those of the author and do not necessarily represent those of RT.