peaccenicked
3rd February 2002, 02:16
IMF Admits Widening Gap Between Rich And Poor Nations
The Post (Lusaka)
January 30, 2002
Posted to the web January 30, 2002
Joe Kaunda
THE disparities between the world's richest and poorest nations are wider than ever, International Monetary Fund (IMF) managing director Horst Köhler admitted on Monday.
Addressing a conference in Washington DC on Humanising the Global Economy, Köhler said nearly three billion people who are trying to survive on less than US $2 a day deserve the chance for a better future.
"Poverty is not just the greatest challenge to peace and stability in the 21st Century, but our greatest moral challenge as well," he said.
However, Köhler said trying to turn back the clock and reverse the process of globalisation will not solve the problems of the world as integration into the global economy still has a huge potential for improving human welfare. "Realising this potential obliges us to work for a better globalization - one that is more inclusive, and seeks a better balancing of the risks and benefits," Köhler said.
"There is an urgent need to develop a political concept for one world, to guide and shape the process of globalization." Köhler said globalisation requires co-operation along with institutions to organise its many forms and to engage true commitment and support to the world's people, based on shared principles and rules.
He said among the important aspects to consider is to ensure that all countries need to have trust that their voices are heard and their interests recognised. "As Pope John Paul II said at the gathering of religious leaders in Assisi, listening to one another 'serves to scatter the shadows of suspicion and misunderstanding'," he said.
Köhler said there should also be trust that each country would live up to its own responsibilities and take into account the effects of its actions on others. He said the third aspect involved international decision making which should be seen to respect national and local responsibilities, religions and cultures.
"And in this context, the Catholic Church can be a leader in building bridges of tolerance between peoples and religions of the world," Köhler said. "Wherever possible global action should be built upon a foundation of inclusion, broad participation and local initiative."
Köhler said the fight against world poverty will only be successful if it is based on the political will and capacity of "self help"- the efforts of poor countries to establish peace, the rule of law, and good governance at home and unlock the creative energies of their people.
He said this requires investment in human capital and infrastructure, as well as economic policies and institutions that encourage private initiative and healthy integration into the global market place. Köhler said he felt encouraged to see this approach reflected very concretely, as is the case in the New Partnership for Africa's Development (NEPAD).
"The greatest asset we have in fighting world poverty is the political will and determination in developing countries to tackle these issues," he said. Köhler said the self-help, while essential, was only half of the equation.
He said to bring about a decisive reduction in world poverty, the efforts of poor countries must be matched by stronger, faster, and more comprehensive support from the international community. Köhler advised that facilitating trade liberalisation was the best form of help as it offered an escape from dependency.
"In my view, the true test of the credibility of wealthy nations' efforts to combat poverty lies in their willingness to open up their markets and phase out trade-distorting subsidies in areas where developing countries have a comparative advantage - as in agriculture, processed foods, textiles and clothing, and light manufactures," Köhler said.
"It is unconscienable for the United States, Japan, and the European Union to spend hundreds of billions of dollars on agricultural subsidies to maintain marginal activities for the benefit of a small segment of their population, while undermining agricultural sectors that are central to peace and development in poor countries. Yet this is exactly what is happening now." Köhler cited an example, where in the United States, price support payments for cotton cost more than US $2 billion a year.
"This is larger than the annual cotton production of all of sub-Saharan Africa and the subsidised US production has taken over 30 per cent of world cotton exports, while cotton sectors that are crucial for economic life in some of the world's poorest countries, like Benin, Chad, Mali, and Togo, are devastated," he said. Köhler further admitted that 2001 was a very difficult year by any standard.
He said even before September 11, economic activity was weakening throughout the world, and the terrorist attacks and their aftermath have deepened the risks and uncertainties. However, Köhler said due to the initiatives taken by the IMF, both individual economies and the international financial system as a whole have so far demonstrated great resilience.
"The bad news is that the global downturn has made life even more difficult for vulnerable countries, while also threatening to further marginalise the world's poorest nations," Köhler said. "This is why I have called strongly for the industrial economies, in particular, to do everything in their power to restore the momentum of global growth."
At the same conference, Köhler announced that the IMF and World Bank are spearheading an effort under the enhanced HIPC Initiative that has already provided US $36 billion of debt relief to 24 poor countries.
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The Post (Lusaka)
January 30, 2002
Posted to the web January 30, 2002
Joe Kaunda
THE disparities between the world's richest and poorest nations are wider than ever, International Monetary Fund (IMF) managing director Horst Köhler admitted on Monday.
Addressing a conference in Washington DC on Humanising the Global Economy, Köhler said nearly three billion people who are trying to survive on less than US $2 a day deserve the chance for a better future.
"Poverty is not just the greatest challenge to peace and stability in the 21st Century, but our greatest moral challenge as well," he said.
However, Köhler said trying to turn back the clock and reverse the process of globalisation will not solve the problems of the world as integration into the global economy still has a huge potential for improving human welfare. "Realising this potential obliges us to work for a better globalization - one that is more inclusive, and seeks a better balancing of the risks and benefits," Köhler said.
"There is an urgent need to develop a political concept for one world, to guide and shape the process of globalization." Köhler said globalisation requires co-operation along with institutions to organise its many forms and to engage true commitment and support to the world's people, based on shared principles and rules.
He said among the important aspects to consider is to ensure that all countries need to have trust that their voices are heard and their interests recognised. "As Pope John Paul II said at the gathering of religious leaders in Assisi, listening to one another 'serves to scatter the shadows of suspicion and misunderstanding'," he said.
Köhler said there should also be trust that each country would live up to its own responsibilities and take into account the effects of its actions on others. He said the third aspect involved international decision making which should be seen to respect national and local responsibilities, religions and cultures.
"And in this context, the Catholic Church can be a leader in building bridges of tolerance between peoples and religions of the world," Köhler said. "Wherever possible global action should be built upon a foundation of inclusion, broad participation and local initiative."
Köhler said the fight against world poverty will only be successful if it is based on the political will and capacity of "self help"- the efforts of poor countries to establish peace, the rule of law, and good governance at home and unlock the creative energies of their people.
He said this requires investment in human capital and infrastructure, as well as economic policies and institutions that encourage private initiative and healthy integration into the global market place. Köhler said he felt encouraged to see this approach reflected very concretely, as is the case in the New Partnership for Africa's Development (NEPAD).
"The greatest asset we have in fighting world poverty is the political will and determination in developing countries to tackle these issues," he said. Köhler said the self-help, while essential, was only half of the equation.
He said to bring about a decisive reduction in world poverty, the efforts of poor countries must be matched by stronger, faster, and more comprehensive support from the international community. Köhler advised that facilitating trade liberalisation was the best form of help as it offered an escape from dependency.
"In my view, the true test of the credibility of wealthy nations' efforts to combat poverty lies in their willingness to open up their markets and phase out trade-distorting subsidies in areas where developing countries have a comparative advantage - as in agriculture, processed foods, textiles and clothing, and light manufactures," Köhler said.
"It is unconscienable for the United States, Japan, and the European Union to spend hundreds of billions of dollars on agricultural subsidies to maintain marginal activities for the benefit of a small segment of their population, while undermining agricultural sectors that are central to peace and development in poor countries. Yet this is exactly what is happening now." Köhler cited an example, where in the United States, price support payments for cotton cost more than US $2 billion a year.
"This is larger than the annual cotton production of all of sub-Saharan Africa and the subsidised US production has taken over 30 per cent of world cotton exports, while cotton sectors that are crucial for economic life in some of the world's poorest countries, like Benin, Chad, Mali, and Togo, are devastated," he said. Köhler further admitted that 2001 was a very difficult year by any standard.
He said even before September 11, economic activity was weakening throughout the world, and the terrorist attacks and their aftermath have deepened the risks and uncertainties. However, Köhler said due to the initiatives taken by the IMF, both individual economies and the international financial system as a whole have so far demonstrated great resilience.
"The bad news is that the global downturn has made life even more difficult for vulnerable countries, while also threatening to further marginalise the world's poorest nations," Köhler said. "This is why I have called strongly for the industrial economies, in particular, to do everything in their power to restore the momentum of global growth."
At the same conference, Köhler announced that the IMF and World Bank are spearheading an effort under the enhanced HIPC Initiative that has already provided US $36 billion of debt relief to 24 poor countries.
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