Short welcomes `end of monetarism'

The speakers at the formal opening ceremonies of the World Bank and International Monetary Fund meeting all delivered the same message. Unexpectedly, it was that the most pressing challenge for the international community was the reduction of poverty and promotion of equality.

"We do not need to look very far to find problems that stand in the way of our objective, namely high-quality growth. By this, I mean growth that is sustainable, that results in a permanent reduction in poverty and greater equality of economic opportunity, and that is respectful of the environment and the rich diversity of national cultures and traditions."

The speaker, addressing the world's finance ministers and central bankers yesterday, was Michel Camdessus, managing director of the IMF and not best known as a friend of the poor and downtrodden.

His speech delighted, among others, Clare Short, the Secretary of State for International development.

Speaking to The Independent in Hong Kong, she said: "There is an emerging new consensus that sees the interests of the international economy and the interest of reducing poverty as coinciding. It's the end of monetarism."

Ms Short said Mr Camdessus's statement indicated that the IMF would consider withholding loans to governments that were not using the money to reduce poverty and promote social goals like universal primary education.

"It was about putting those imperatives into a well-functioning market economy. It's wonderful. We've just got to do it now. I do think there's a real possibility of an era of very significant progress," she said.

She added that Britain had enough of a position on the world stage to have an influence. "If we can make any difference I think people in Britain will be proud of their country," Ms Short said.

Mr Camdessus's views were endorsed by James Wolfensohn, the president of the World Bank, and Robert Rubin, the US Treasury Secretary, as well as Gordon Brown, the Chancellor of the Exchequer.