Hidden Dimensions of Poverty ― Natural Resources and the Environment

This report focuses on the impact of environmental degradation on the poorest, and the sustainability of the economic development model. The global pattern of development observed over the past 25 years, has yielded impressive returns, but has come at a high cost of environmental degradation. Yet, we find that the environmental costs of development are disproportionately borne by the extreme poor and that the changing quality of local natural capital plays a determining role in the process of poverty reduction. Importantly, regardless of the definition of sustainability used, the historical model of development does not appear to be sustainable in the poorest areas of the world. Therefore, achieving the World Bank's poverty goals in a sustainable manner will require more aggressive policy changes than are commonly appreciated. No single set of policy recommendations can apply for all countries, as de-coupling economic and poverty alleviation growth from environmental damages depends on the country context. Still, one truism does apply to all countries: the Twin Goals of poverty alleviation and shared prosperity simply cannot be achieved in an economy and environment that is un-sustainable. Maintaining the sustainable use of natural capital and healthy ecosystems is a fundamental part of what countries need to achieve the Twin Goals.

The World Bank came into formal existence in 1945 following the international ratification of the Bretton Woods agreements. It is a vital source of financial and technical assistance to developing countries around the world. The organization's activities are focused on education, health, agriculture and rural development, environmental protection, establishing and enforcing regulations, infrastructure development, governance and legal institutions development. The World Bank is made up of two unique development institutions owned by its 185 Member Countries. The International Bank for Reconstruction and Development (IBRD) focuses on middle income and creditworthy poor countries and the International Development Association (IDA), which focuses on the poorest countries in the world.