World Bank Urges Poor Countries to Improve Risk Management to Boost Growth

The World Bank has called on developing countries to understand that they must improve risk management if they want to improve living standards.

According to a World Bank, titled World Development Report 2014: Risk and Opportunity-Managing Risk for Development, the group found that risk management was at the heart how developing economies can grow their economies safely.

The forward to the report ,written by World Bank president Jim Yong Kim, said developing countries must evolve from being what he called "crisis managers" to becoming "systematic risk managers".

Developing the ability to handle risk is essential, argued Kim, in any country's quest to increasing the quality of life among its population.

Risk Management

The World Bank's report identified five key insights into the process of risk management to unlock the full growth potential of emerging countries.

The report said "taking on risks is necessary to pursue opportunities for development. The risk of inaction is the worst of all".

The report also found it was essential to move from improvised response to crises to a more "proactive, systematic and integrated risk management" that was addressed "through private and public action".

It also concluded that governments had a critical role to play in managing responses to crises and co-ordinating individuals to work together to overcome them.

Examples of Fighting Poverty

The report listed numerous ways that emerging nations have tackled their problems through various policies and also proposals for the future.

These included insurance for farmers that the World Bank found can help agricultural production citing a number of studies about farmers in Tamil Nadu in India who actually increased their crop yield productivity.

This was due to insurance protection, the report noted.

Housing Problem

Improving housing opportunity was also listed as a major area that needed attention from the World Bank and governments in developing nations.

Being able to strengthen citizens' housing finance "improves people's resilience and helps them avoid poverty traps" said the report.

World Bank's Goals

This latest report by the World Bank is part of the institution's focus on two major goals.

One is reducing extreme poverty in the world by 2030 and the second is boosting shared prosperity of the bottom 40% of the population in developing countries.

These twin goals were announced as the major targets of the World Bank Group in April 2013.