UPDATE 4-UN: Rich must not cut aid to poor to balance budget

Mon Sep 20, 2010 8:51pm EDT

Related Topics

* Progress on meeting U.N. poverty goals by 2015 uneven

* France, Spain, Greece urge tax to raise poverty funding

* Bhutan proposes making happiness a development goal (Adds details from speeches, quotes, background)

By Lesley Wroughton and Helen Popper

UNITED NATIONS, Sept 20 (Reuters) - U.N. Secretary-General Ban Ki-moon pressed debt-ridden donor countries on Monday not to cut aid to the poor despite their budgetary woes.

"We should not balance budgets on the backs of the poor," Ban told 140 leaders at the start of a three-day summit to review progress in meeting U.N. poverty goals by 2015.

During their speeches, leaders pledged to step up efforts to meet the Millennium Development Goals (MDGs) -- agreed 10 years ago. But, as expected, they offered little in the way of new resources to help the world's poorest countries.

The United Nations agrees the world will meet the goals to halve global poverty and hunger by 2015 but is behind on other goals which cover improving child education, child mortality and maternal health; combating diseases including AIDS, and promoting gender equality and environmental sustainability.

Rising incomes in emerging economic powers like China is the main reason for progress in tackling poverty there, while population growth has set back efforts in Africa and India.

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Highlights from the U.N. summit: [nN20260490]

Factbox on the Millennium Development Goals[nN20260425]

Also see Reuters Alertnet blog: http:/blogs.reuters.com/global/2010/09/20/live-blog/

Clinton Global Initiative meetings [nN20544973]

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The World Bank said it would increase spending on education by $750 million over the next five years. [nN20274673]

Spanish Prime Minister Jose Luis Rodriguez Zapatero, whose government cut development aid in the face of a fiscal crisis and high unemployment, said countries were grappling with difficult decisions as they try to revive economic growth.

He urged the world to consider other ways to fund programs that tackle poverty, hunger and climate changes.

"We need to make more effort to look for alternative financing sources ... that aren't as vulnerable as the budgets of developed countries when faced with crises like the one we're seeing today," he said.

Both he and French President Nicolas Sarkozy called for some form of financial tax to raise money to combat poverty, an idea already rejected by the International Monetary Fund and many Group of 20 major developed and developing nations.

Greek Prime Minister George Papandreou said Greece's severe fiscal crisis, which prompted an IMF bailout, showed no country was immune to job losses, pandemics or the "vagaries of the financial markets."

"Our recent experience has given us real insight into how one small country's problems can ricochet around the world," he said, urging donors to explore other ways to raise development funds, including through a financial tax or green bonds.

ACTIONS TO MAKE AID EFFECTIVE

Amid the high-minded talk about poverty and budgets, Bhutan's Prime Minister Jigme Thinley proposed the addition of happiness as the ninth MDG goal.

"Since happiness is the ultimate desire of every citizen it must be the purpose of development to create enabling conditions for happiness," he said.

Donors demanded more work to ensure aid is not wasted on programs that do not help the poor. Anti-poverty campaigners said donors should be held accountable for the aid they have promised and failed to deliver.

British International Development Secretary Andrew Mitchell called for a plan to track progress in meeting the poverty goals over the remaining five years of the MDGs.

He argued for more transparency, better donor coordination and a special focus on helping women and infants.

"We want a proper agenda for action over each of the next five years, not a load of blah-blah and big sums of money being thrown about, although big sums of money are important," he told reporters.

U.S. Agency for International Development (USAID) chief Rajiv Shah told Reuters the United States would press for a new development approach that highlighted economic growth, accountability and tackling corruption.

With U.S. congressional elections on Nov. 2 focusing on the economy and job losses, Washington is pressed to show Americans that their tax dollars are being put to good use. [nN19239202]

Vietnam and Bolivia said poverty could not be beaten as long as some countries continued to benefit from skewed international economic and trading systems.

Georgian President Mikheil Saakashvili said aid would not work unless countries were allowed to design their own anti-poverty programs tailored to local conditions.

"Of course we need more money. More money matters. But aid money will not deliver concrete results unless we pay more attention to the essential idea of local ownership." (Additional reporting by Andrew Quinn, Patrick Worsnip, Arshad Mohammed and Edith Honan; editing by Cynthia Osterman and Christopher Wilson)

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