IMF says wiping out poverty key challenge in new millennium

International Monetary Fund (IMF) managing director Michael Camdessus said today a key challenge in the new millennium was the need for "an unwavering focus" on poverty reduction, reports AFP.

The reduction of poverty was "even more daunting and urgent challenge" than the prevention of financial crises in a world of closely-linked capital markets, Camdessus said in a special article he contributed to Singapore's Straits Times newspaper.

He urged the advanced countries to live up to their pledges of assistance and reinforce their actions in poverty eradication by opening their doors wider to exports from poor countries.

Camdessus said the challenge of poverty was not confined just to the countries that, in per capita terms, qualify for debt relief and concessional lending.

He pointed out that one of the sad truths of the financial crisis which broke out in mid-1997 and swept through emerging market economies was "the most vulnerable members of those societies bore the heaviest burden."

"Thus, it is essential that governments in these countries - supported by the international community - maintain their commitment to social-safety-net programmes to ensure that everybody is able to weather the storm," said the IMF chief who is scheduled to step down mid-February after nearly 13 years in office.

He said some 1.3 billion people live on less than one US dollar a day in the world's poorest countries.

Camdessus said there was every reason to believe the coming decades would bring material benefits to hundreds of millions more people, and bold steps should be made to improve human conditions throughout the world.

"But this will require an unwavering focus on poverty reduction.

"And for the world to be able to maintain and develop it, it will be essential the new millennium be marked by renewed commitment to stability through strengthened policy discipline in the framework of the new financial architecture," Camdessus explained.

The IMF is in the forefront of efforts to devise the new financial architecture that can help prevent a repeat of the financial crisis which plunged most of Asia into recession.

Camdessus said perhaps the most important lesson of the 1990s was the world was now confronted by a new and more complex breed of financial crisis, "which can be prevented only if we continue to tackle the shortcomings of the global financial system."

He said the rapid rebound of the emerging market economies from the depths of the crisis underlined the benefits of a world tied together by open markets, freer capital flows and international policy cooperation.

But uncertainties continued to hang over the world economy and it was essential to avoid complacency, he warned.

Camdessus said financial systems in several of the crisis-hit countries remained burdened by bad debts and added corporate restructuring still had a long way to go if these economies were to regain their health fully.