DUBAI, 23 September 2003 — Greater trade liberalization and increased development aid are the best ways to alleviate global poverty, the development committee of the World Bank and International Monetary Fund said yesterday.

German Federal Minister for Economic Cooperation and Development Heidemarie Wieczorek-Zeul called on developing countries to diversify their economies in order to reduce dependency on fluctuations on the commodities markets.

At the same time, industrial nations should reduce subsidies so that prices of raw materials do not drop further, she said.

Some 24 of the 184 members of the World Bank and IMF are represented in the development committee, which is holding discussions as part of the World Bank and IMF annual meeting currently under way in Dubai.

The committee called for the poorer countries to be given a greater say in international institutions as well as in negotiations.

Germany proposed increasing the voting quota of the poor countries within the World Bank and IMF from 41 to 43 percent.

Wieczorek-Zeul said it was important to strengthen the role of international institutions, following the failure of the World Trade Organization talks in Cancun. The German minister and her colleagues called for an early resumption of WTO talks.

“In the process of development, trade is more important than economic assistance,” Brazilian Finance Minister Antonio Palocci Filho told the conference.

Brazil was at the forefront of the stand taken by developing countries in Cancun which rejected proposals by the industrialized world to reduce subsidies.

The development committee praised the role taken by the World Bank in the development of the Palestinian territories and in preparations for the rebuilding of Iraq.

Success in the West Bank and Gaza Strip as well as in Iraq are essential for stability and development of the entire region, the committee said.

Earlier, World Bank President James Wolfensohn said trade was the key to winning the fight against poverty.

Wolfensohn said a good round of trade liberalization talks would generate an extra $520 billion in extra income for both rich and poor countries.

Resulting economic growth could free an estimated 140 million people from abject poverty by 2015, according to a study by the World Bank.