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“Super-bankers” criticised for stalling poverty alleviation

The head of the United Nations Development Programme has criticised the financial sector for creating economic crises that threaten targets aimed at reducing poverty worldwide.

When delivering a lecture in Bombay, Kemal Dervis pointed out that as with the Asian crisis of 1997 and the dot-com crisis of 2001, the current US sub-prime crisis has been precipitated by poor regulation of the financial sector.

Mr Dervis described “super-bankers”, hedge-fund managers and owners of private equity firms as “the new barons of twenty-first century capitalism.”

Adding: “It is almost unbelievable: 40% of total corporate profits in the US in recent years went to the financial sector that in itself does not ‘produce’ … but that ‘intermediates and organises’ the resources that do produce.”

According to Mr Dervis, a slowdown in global economic growth is in danger of delaying the UN’s Millennium Development Goals, which aim to halve extreme poverty and the spread of HIV/Aids by 2015.

He warns: “A world economy growing at four to five per cent in purchasing parity terms is a wonderful thing for development. A major slowdown would be a tremendous set-back.”

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