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IMF Urges Countries to Redouble Growth Drive, Revive MDGs

Strauss-Kahn at United Nations: “This talk of cooperation is not just a mantra, it is real, it is essential, and it affects people's lives” (photo: Emmanuel Dunand/AFP)

MILLENNIUM DEVELOPMENT GOALS

IMF Urges Countries to Redouble Growth Drive, Revive MDGs

IMF Survey online

September 20, 2010

  • Revival of MDGs hinges on restoration of balanced, sustainable, global growth
  • Strauss-Kahn says world needs sense of shared responsibility
  • UN urges world to turn “blueprint for ending extreme poverty” into reality

IMF Managing Director Dominique Strauss-Kahn, saying the global economic crisis had set back momentum toward the Millennium Development Goals (MDGs), urged countries to redouble efforts to get back on track, arguing that a revival of world economic growth was the key to success.

Saying that the ultimate goal was a world free of poverty and conflict, Strauss-Kahn said in an address to the United Nations General Assembly that before the global crisis many developing countries had achieved strong growth and stability, mainly driven by “good homegrown policies, but supported by an enabling international environment.”

But the financial crisis and earlier food and fuel crisis had set back momentum. As a result, about 70 million fewer people will have escaped from the “chains of poverty by 2020,” he said. And many millions more will suffer the consequences of prolonged unemployment and underemployment.

He urged countries to redouble efforts to get back on track. “For this to happen—and this is my main message today—everything hinges on the restoration of balanced, sustainable, global growth. Without this, all other efforts to achieve the Millennium Development Goals will be frustrated. We will be treading water against a rapidly advancing tide.”

Sense of urgency

Strauss-Kahn, addressing a gathering of world leaders on the MDGs in New York, said that to regain the momentum, “we need a sense of shared responsibility between the various actors—the developing countries themselves, the advanced economies, and the international institutions. “

The advanced economies and leading emerging markets should focus first and foremost on securing a sustainable global recovery, and getting the growth engine up and running again. Analysis undertaken by the IMF and World Bank for the G-20 has shown that cooperative action by the world's major economies could produce real results—boosting world growth by 2 percentage points over five years, creating 30 million new jobs, and lifting 33 million people out of poverty. “This talk of cooperation is not just a mantra, it is real, it is essential, and it affects people's lives,” Strauss-Kahn said.

Strauss-Kahn gives interview outside United Nations Headquarters in New York during UN’s Millennium Development Goals summit (photo: Stephen Jaffe/IMF)

In his own speech, UN Secretary-General Ban Ki-moon urged world leaders attending the United Nations summit on the MDGs to turn what he dubbed “a blueprint for ending extreme poverty” into reality by providing the necessary investment, aid, and political will to help the planet’s most vulnerable.

“There is no global project more worthwhile,” Ban told the nearly 140 heads of state and government taking part in the three-day meeting at UN Headquarters in New York. “Let us send a strong message of hope. Let us keep the promise.”

The high-level meeting of the General Assembly is being held to take stock of the progress so far toward the MDGs—which include slashing poverty, combating disease, fighting hunger, protecting the environment, and boosting education—and to determine what else needs to be done to reach the goals by their target date of 2015.

Keeping promises

Strauss-Kahn emphasized that advanced economies should keep earlier promises made to substantially boost aid to developing countries and to open up trade. “Exports have the ability to unleash a wave of productivity and growth in developing countries,” he added.

The developing countries, he argued, must also help themselves, which means building on past success. Because they built the levies during good times, they were able to lessen the economic hardship when the crisis arrived. They had the fiscal room—and sometimes the monetary room—to support their economies and help vulnerable people withstand the shock.

IMF’s Strauss-Kahn addresses Millennium Development Goals summit at United Nations Headquarters in New York (photo: Stephen Jaffe/IMF)

“They must now rebuild their policy buffers to be ready for the next shock, including by mobilizing domestic tax revenue. This will create room to invest in infrastructure and strengthen social safety nets, to accelerate growth and protect the poor and vulnerable.”

The international financial institutions must also play their part. During the crisis, the IMF rapidly increased its support for low-income members—quadrupling its lending, with zero interest rates, and with streamlined conditionality. These efforts were designed to support growth—sustained, pro-poor, inclusive growth—which is the priority.

Robert Zoellick, President of the World Bank, which works jointly with the IMF, pledged to mobilize substantial new investments in a wide range of sectors to help countries close the gap and achieve the MDGs.

“We are focusing particularly on ‘The Access Agenda,’ ” Zoellick said, ”helping to ensure access to basic health, quality schooling, clean water, energy, food, and jobs—looking, not just at the numbers, but at the quality of services.”