February 14, 2001
Indian Prime Minister Atal Behari Vajpayee has suggested the imposition of an international levy on capital flows between developed countries and all capital repatriations from developing countries, reports the Times of India. The money he says can then be credited to a Global Poverty Alleviation Fund.
Among other purposes the Fund could serve, said Vajpayee, would be: accelerated liquidation of all public external debts of low-income countries, framing of poverty alleviation programs targeted specifically at those who have lost their livelihoods in economic crises born out of reversal of external capital flows in developing countries, assistance in enhancement of skills and access to finance needed by the poor to compete effectively in the global economy. The Fund could also help place technologies that save lives, increase food output, and generate renewable energy for rural areas, for use by developing countries.
The suggestion for a Global Fund came on Wednesday during Vajpayee's inaugural address at the first Delhi Sustainable Development Summit 2001 organized by the Tata Energy Research Institute, notes the story. Global leaders, thinkers, and environmentalists participated in the summit, says the story, noting that among those who also spoke during the inaugural session were UNDP administrator Mark Malloch Brown, and Maurice Strong, president of the UN University for Peace.
Vajpayee also said there is a need substantially to increase the resources of governments in developing countries to pursue developmental projects and programs aimed specifically at poverty eradication, notes the story. Moreover, he said there was also a need for enhancement of the resources of bilateral and multilateral agencies. "This calls for a far higher level of political will in industrialized countries than is manifest today," he said.
"What we need is a comprehensive and holistic global strategy which involves the fullest mobilization of all our economic, social, cultural and technological resources," Vajpayee said, noting that a narrowly focused economic model can neither remove global poverty nor yield sustainable development. Pointing to the global inequity measured in the World Bank's latest World Development Indicators, Vajpayee said a sixth of the world's population receives 78 percent of world income, while three-fifths of the world's population living in the poorest 61 countries receive only six per cent of the world's income.
The news comes as the Earth Times reports that economic inequality is growing faster everyday, says the World Institute for Development Economics Research (WIDER) of the UN University (UNU). More and more people are becoming poor and the trend is likely to grow in the next decade, WIDER says.
Branco Milanovic, principal economist of the World Bank's Development Research Group and author of "True World Income Distribution", said in a public lecture to UNU-WIDER that from 1980 to 1990, there was an explosion of inequality not only among developing countries but also in North America and Western Europe. This has been linked to the phenomenon of globalization, which is eroding the importance of national borders to economic life, he said. Within countries, inequalities are rising, he added, noting that this is especially true among the poor and populous countries.
Meanwhile, notes the Times of India, in an article published in the International Herald Tribune, World Bank Chief Economist Nicolas Stern called upon rich countries unilaterally to open their markets to duty-free imports from the 48 least developed countries. He pointed out that several countries had reduced poverty by liberalizing their trade regimes, but existing trade barriers have limited their gains. Recent research by the Bank has found that trade barriers imposed by high-income countries, along with agricultural subsidies, have cost developing nations much more in lost export opportunities than the foreign aid they receive each year.
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