Study - Rich countries need to give more to poor nations

Wednesday, July 9, 2003

GENEVA -- International programs to help poor nations develop and industrialize are failing in many countries and need radical changes if the world is to meet its targets for reducing poverty, a major United Nations report said Tuesday.

Instead of forcing developing countries to cut back on public spending, the International Monetary Fund and World Bank should be pressing rich countries to provide more help, the 367-page Human Development Report 2003 said.

Despite a widespread assumption that all countries are slowly getting richer, the report says that 54 are poorer now than they were in 1990, while life expectancy fell in 34 countries -- primarily because of the HIV/AIDS epidemic -- and 21 countries are hungrier than they were in 1990.

"For many countries, the 1990s were a decade of despair," said the report, produced by the U.N. Development Program.

It said at the current rate the world will fail to meet most of the "Millennium Development Goals" agreed upon by the countries of the world in 2000. They call for poverty to be reduced by half by 2015 and for big steps forward in education, sanitation and health.

UNDP Administrator Mark Malloch-Brown said a "guerrilla assault" is needed on the so-called "Washington Consensus" that sets out the general policies used by the IMF and the World Bank -- including an emphasis on careful control of public spending, tax reform, trade liberalization and privatization.

"The IMF and the World Bank should no longer set these kinds of ceilings" on spending, he said.

"These measures were introduced at a time when finances were leaking red ink all over the place and there was an urgent need to stabilize. The strategy had its time and place. The Washington Consensus did some good things, but people stuck with it too long -- and it wasn't enough."

The report cited the case of Malawi, which has produced a strategy for reducing poverty based on IMF and World Bank guidelines. But the plan would not achieve the Millennium Development Goals.

"Malawi requires far more donor assistance -- as do many other countries in similar circumstances," the report said.

"Rather than being told to lower their sights, they should be aided in achieving the goals, with the IMF and World Bank helping to mobilize the needed additional assistance."

The study says a total reliance on market forces and increased trade to achieve development will not succeed.

"Public interventions are necessary to set the preconditions for market-led economic growth," said Sakiko Fukuda-Parr, chief author of the report.

The IMF had no immediate comment on the U.N. report.

The study also includes UNDP's annual Human Development Index, which ranks 175 countries based on income per person, life expectancy, literacy and school enrollment.

For the third year in a row, Norway topped the list, which is based on 2001 data. Two other Scandinavian countries -- Iceland and Sweden -- followed. The United States dropped one place to seventh but for the first time overtook Canada -- which was top of the list in 2000.

The bottom 25 places on the list were all held by countries in sub-Saharan Africa, with Sierra Leone in last position.


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