Growth Boost Key to Reaching Global Poverty Goals

Global financial crisis set back Millennium Development Goals progress

Advanced countries must restore growth, keep aid promises, boost trade access

Poorer countries should support growth policies by building resilience to shocks

Both developed and developing countries will need to play their part in this endeavor, the economists said in a background note for a United Nations conference on the goals.

“Everything hinges on restoring balanced and sustainable global growth,” IMF Managing Director Dominique Strauss-Kahn said in a statement. “This is the foundation upon which everything else is built. Growth is not enough but certainly, without it, other efforts to achieve the Millennium Development Goals will be frustrated,” Strauss-Kahn added.

The note added that further actions by advanced and dynamic emerging market economies are called for to safeguard the global recovery, create a more robust financial system, and improve market access for low-income country exports.

“Of course, the developing countries’ own policies will be absolutely critical in restoring strong growth and making them more resilient to future shocks,” IMF First Deputy Managing Director John Lipsky told a panel discussing the background note September 16 at IMF headquarters in Washington D.C.

UN Secretary-General Ban Ki-moon called on world leaders to attend a summit in New York on September 20–22 to accelerate progress toward the Millennium Development Goals, which aim to cut poverty, hunger, disease, maternal and child deaths, and other ills by a 2015 deadline. Strauss-Kahn will address the summit on September 20.

More resilience to shocks

Boosting growth in developing countries is not the only remedy needed to regain momentum toward the development goals, but it is a necessary condition. Growth must be pro-poor, including through growth patterns that benefit the areas and sectors where the poor are the most numerous.

The IMF background note said low-income countries face massive financing needs to close the “infrastructure gap” and address climate change—both impediments to growth and long-term development. Aid commitments should be fulfilled, but can meet only part of these needs. Countries need to mobilize and use domestic resources more effectively, create conditions to attract foreign direct investment, and strengthen their capacity for “safe borrowing.” All these should aim at engendering private sector-led growth.

The global crisis has shown that, to...