Economic Growth Key to UN Poverty Goals – IMF
By Lesley Wroughton
September 17, 2010, 8:39pm
WASHINGTON, Sept. 17 (Reuters) – The global financial crisis derailed efforts to slash poverty and hunger worldwide by 2015, but boosting economic growth in poor countries can help restore momentum again, the International Monetary Fund said.
In a position note before a United Nations summit of world leaders next week to take stock of the UN Millennium Development Goals (MDGs), the IMF said the goals will be difficult to meet without restoring growth.
Leaders are expected to stick to the eight goals but are unlikely to make ambitious new promises including on aid.
IMF First Deputy Managing Director John Lipsky said millions of people were thrown back into poverty, while others’ escape from poverty was delayed due to the crisis, which was exacerbated for the poor by record food prices in 2008.
“To resume progress toward the MDGs, what is needed is a speedy return to the pre-crisis path of rapid growth, especially pro-poor growth and inclusive growth,” he said in a speech.
He said even with tight budgets, rich nations needed to deliver on their 2005 promises to double aid to Africa by 2010 so that poorer countries can build roads, bridges and other infrastructure and respond to the effects of climate changes.
Aid from rich countries has remained constant at around $38 billion a year since 2008.
He said poorer economies, which were doing well before the crisis thanks to good economic policies, needed to focus on making their economies resilient to future shocks.
The IMF said trade was one area where action can spur economic growth in poor countries and help reduce poverty and create jobs.
“There is scope for more and better trade preferences along with several complementary actions to bolster support for developing countries’ exports,” the IMF said.
To benefit from more open borders, developing countries would need to tackle their own high tariffs and other barriers to trade, which restrict imports.
Lipsky urged world leaders to conclude the Doha Round of global trade talks, which have been stalled for two years. Rich powers and emerging economies are disagreeing over the extent to which poorer countries should open up their markets.
Negotiators say a deal will only be possible in 2011 at the earliest.
He noted that one of the biggest developments in the past decade was that developing countries have been trading more intensively with each other.
Meanwhile, rich countries can also encourage investment in developing countries that will help growth, the IMF said. It said Africa needed an estimated $93 billion a year to develop its infrastructure, which has suffered from chronic underfunding over the past decade.