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.”