More than 20 percent people on Earth live in extreme poverty and are enduring inhuman sufferings, according to the World Bank. Combating extreme poverty is the aim of the entire development community, and the same goal has been embraced by many World Bank presidents.

The World Bank's new president, Jim Yong Kim, has spoken of the need to "bend the arc of history in order to eliminate extreme poverty and achieve shared prosperity". At a time when the World Bank's resources and the budgetary resources of governments around the world are more limited than Kim might wish for, Brazil offers important lessons on how to eliminate extreme poverty and reduce inequality.

Perhaps the biggest lesson to be learned from Brazil is that poverty can be reduced in a very cost-effective way, that is, if the programs pursued are targeted well.