World Bank president: Impressive development but Romania still has to create safety nets for the poorest

Despite progress made over the last 20 years, Romania still has the highest poverty levels in the EU, said the World Bank President Jim Yong Kim yesterday (May 9) after a meeting with Romania's PM Victor Ponta. Judging from the World Bank President's comments, poverty and the progress of structural reforms were among the main topics of conversation with PM Ponta. President Kim highlighted the fact that more than 30 percent of Romanians live on less than USD 5 a day. He also made a specific reference to Romania's Roma population and the high levels of poverty found in Roma communities. “I believe that it is a moral imperative for all governments to put in place safety nets for the poorest and to invest in the education and health care of those most in need,” said the World Bank President. He added that Romania had a an opportunity to “be a model for the world" If the country continues to educate the poorest, train them for jobs, and provide them with quality health care. The World Bank, together with the European Commission and the IMF granted Romania loans to weather the storm, and the country has already started paying back the amounts owed. Although Kim described the progress made in Romania on deficit reduction, he asked the Government to pursue deeper structural reforms in many sectors of the economy and public administration, as well as to “hold the course on fiscal consolidation.” “To ensure that growth continues to benefit the poor, we believe that Romania should maintain flexible labor markets, which will facilitate the movement from low to high productivity jobs, and will upgrade the skills of its labor force. Establishing a simpler business environment will allow entrepreneurs to create jobs and add value to the economy. But adequate social protection will also be needed for the most vulnerable,” he added. Jim Yong Kim also underlined Romania's positive points, such as the fiscal deficit, which is down from 7.3 percent in 2009 to 2.5 percent in 2012, as well as the total public debt to GDP, of 35 percent, compared to the European Union average of 83 percent. editor@romania-insider.com