The critical debate on globalization has been subdued since September 11. But the important issues it raises have not gone away and need to remain at the core of national and international policy agendas. The tragic events of September 11 have surely widened public understanding and shaken the complacency that led many to behave as if developments in remote countries and societies could be safely ignored.

Globalization -- the process through which an increasingly free flow of ideas, people, goods, services, and capital leads to the integration of economies and societies -- is not simply being imposed upon us. It is the product of forces for change that are deeply embedded in human nature -- the desire for a better life, for new and better ways of doing things, and for expanded horizons and freedom of choice. It also reflects political choices in favor of more openness, which for the most part has gone hand-in-hand with the consolidation of democracy.

The past 50 years have been a period of growing economic and political freedom and rising prosperity. Global per capita income has more than tripled, and most of the world has experienced major improvements in literacy and life expectancy. Among the biggest gainers have been developing nations that are home to half of the world's population, which moved to take advantage of the opportunities of the global economy over the past two decades. These countries -- whose ranks include Brazil, Chile, China, India, Korea, and Mexico -- were able to double their share in world trade and raise per capita incomes. Their experience demonstrates that integration into the global economy can bring major advantages for developing countries.

But there is equally clear evidence that far too many of the world's people have been left behind. The disparities between the world's richest and poorest nations are wider than ever. Nearly 3 billion people who are trying to survive on less than $2 a day deserve the chance for a better future. Poverty is not just the greatest challenge to peace and stability in the 21st century, but our greatest moral challenge as well.

Trying to turn back the clock and reverse the process of globalization will not solve the problems of the world. Integration into the global economy still has a huge potential for improving human welfare. Realizing this potential obliges us to work for a better globalization -- one that is more inclusive and seeks a better balancing of the risks and benefits. There is an urgent need to develop a political concept for one world, to guide and shape the process of globalization.

Most of all, globalization requires cooperation along with institutions to organize many of its forms. And to engage the true commitment and support of the world's people, that cooperation needs to be based on shared principles and rules. What is most important? First, all countries need to have trust that their voices will be heard and their interests recognized. Second, there must be trust that each country will live up to its own responsibilities and take into account the effects of its actions on others. Third, international decision-making should be seen to respect national and local responsibilities, religions, cultures, and traditions. Wherever possible, global action should be built upon a foundation of inclusion, broad participation, and local initiative. And finally, a global economy needs global ethics, reflecting respect for human rights but equally recognizing personal and social responsibility. As the world has become more integrated and interdependent, the scope for applying such fundamental values has widened.

THE IMF AND THE WORLD BANK

The Bretton Woods institutions -- the IMF and World Bank -- were created in 1944 to help restore and sustain the benefits of global integration by promoting openness, trust, and international cooperation. And despite all the criticisms, if these institutions did not already exist they would need to be invented. They pursue a common objective of promoting broadly shared prosperity, with a good division of labor and close partnership to increase their joint effectiveness. The World Bank thus concentrates on long-term investment projects, institution-building, and assistance in dealing with social, environmental, and poverty issues. For its part, the IMF focuses on the functioning of the international monetary system and on promoting sound macroeconomic policies as a precondition for sustained growth. Private capital flows have become the most important source of financing for growth, productivity, and job creation. But they can also be a source of volatility and crisis. This obliges the IMF to help countries take advantage of the opportunities of global capital markets while minimizing the risks, and to work for the stability of the international financial system.

The greatest assets that the Bretton Woods institutions have in fulfilling these objectives are their global membership and their culture of consensus-building, trust, and mutual respect. Particularly since the Asian crisis, the IMF is in a process of reform and change designed to strengthen its cooperative nature and improve its ability to serve member countries. The IMF has gone from being a relatively closed organization to one that is overwhelmingly open and transparent, as anyone who has looked at our Internet Web site over the past year can testify. Equally, we are encouraging and promoting transparency in member countries. The IMF has led a conceptual sea-change in economic governance, based on using standards and codes for sound economic and financial management and corporate governance, along with its annual surveillance of member countries to create a level playing field for the global economy. We are working on a comprehensive strategy to safeguard the stability and integrity of the international financial system as a global public good. In particular, the joint IMF-World Bank Financial Sector Assessment Program (FSAP) has become the core of our efforts to strengthen domestic financial sectors, combat money laundering, and help to thwart the financing of terrorism. We are taking steps to streamline IMF conditionality and make room for true national ownership of reform programs. Conditionality remains essential because good policies are necessary for stability and growth. But this does not mean we should lecture or dominate our members. Sustained progress of programs requires that countries take responsibility for them, which means they themselves must believe that reforms are in their best interest.

Finally, more than ever, the IMF has become an institution that listens and learns, and not just from its member countries.

RESTORING GLOBAL GROWTH

The year 2001 was a very difficult one by any standard. Even before September 11, economic activity was weakening throughout the world; the terrorist attacks and their aftermath have deepened the risks and uncertainties. The good news is that, due also to the initiatives taken by the IMF, both individual economies and the international financial system as a whole have so far demonstrated great resilience. The bad news is that the global downturn has made life even more difficult for vulnerable countries, while also threatening to further marginalize the world's poorest nations. This is why I have called strongly for the industrial economies, in particular, to do everything in their power to restore the momentum of global growth.

A market economy, integrated into the world, must possess healthy institutions and a supervisory and regulatory framework that safeguards competition, promotes equity, and fosters good sovereign and corporate governance. And this means also that the IMF has to cooperate even more effectively with the World Bank and the regional development banks, which are mainly responsible for institution-building and social protection.

I do think it is right for the IMF to remain strongly engaged with the world's poorest countries, because it is a universal institution dedicated to helping all its members. As a guidepost for reducing world poverty, we have joined other nations and international institutions in supporting the United Nations' Millennium Development Goals for 2015. While these goals are ambitious, in my view they can and must be achieved. But for this to happen, the international community can't continue with "business as usual."

The fight against world poverty will be successful only if it is based on the political will and capacity of "self-help" -- the efforts of poor countries to establish peace, the rule of law, and good governance at home and to unlock the creative energies of their people. It requires investment, not least in human capital and infrastructure, as well as economic policies and institutions that encourage private initiative and healthy integration into the global marketplace. I am encouraged to see this approach reflected very concretely, for instance, in the New Partnership for Africa's Development (NEPAD). The greatest asset we have in fighting world poverty is the political will and determination in developing countries to tackle these issues.

THE PRSP PROCESS

To make the fullest possible use of this asset, the IMF and World Bank have worked to establish a country-led process for the development of poverty reduction strategies. Earlier this month, our International Conference on Poverty Reduction Strategies brought together several hundred representatives from the official community and civil society to assess the first two years of experience with the PRSP (Poverty Reduction Strategy Papers) process. The conference demonstrated that the PRSP approach is accepted as a promising way to design poverty reduction strategies that can command broad support both within a country and among its external development partners. But participants were troubled by the inherent tensions in the process and the administrative burdens that it generates. The proposals they made at the conference will be key inputs for our executive board's review of the PRSP process and the IMF's Poverty Reduction and Growth Facility in March. I see clear room for further improvement, not least through deeper analysis of the root causes of poverty and increased technical assistance from the IMF and the donor community to build institutional capacities.

But self-help, while essential, is only half of the equation. To bring about a decisive reduction in world poverty, the efforts of poor countries must be matched by stronger, faster, and more comprehensive support from the international community. Thanks in no small measure to the strong interest and support of civil society and faith organizations, it was possible to build consensus among wealthy nations to finance increased debt relief for heavily indebted poor countries. Now the IMF and World Bank are spearheading an effort under the enhanced HIPC Initiative that has already provided $36 billion of debt relief to 24 poor countries. (World Bank President) Jim Wolfensohn and I have pledged every effort to make it a success by working to see that the resources are used effectively for poverty reduction and by doing our utmost to ensure that the benefits reach the remaining eligible countries -- including difficult post-conflict cases.

TRADE AND AID

But debt relief is no panacea, and the campaign for debt cancellation must not detract from decisions that are needed for durable progress in reducing world poverty. Countries will not escape the poverty trap without developing the legal and institutional foundations of a modern economy, including the ability to borrow and lend safely. Moreover, the resources available from further debt relief or outright cancellation do not measure up to the potential for action by the wealthy societies in the key areas of trade and aid. As we prepare for the United Nations Conference on Financing for Development in Monterrey and the Johannesburg Conference on Sustainable Development, I would urge the faith-based and civil society organizations to bring the same energy and commitment to a new campaign for increased aid and better access to international trade that they have shown in advancing the case for debt relief.

Trade liberalization is the best form of help for self-help, both because it offers an escape from aid dependency and because it is a win-win game. In my view, the true test of the credibility of wealthy nations' efforts to combat poverty lies in their willingness to open up their markets and phase out trade-distorting subsidies in areas where developing countries have a comparative advantage -- as in agriculture, processed foods, textiles and clothing, and light manufactures.

I am convinced that globalization provides the incentive, the obligation, and the opportunity to make the world a better place for all its people.

And so I urge you to keep pricking the world's conscience, to keep looking for practical ways to put solidarity into action -- not least by pressing for action on increased aid, trade, and more rapid structural change in the advanced economies. The IMF wants to be a good catalyst in that partnership.

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Note: The opinions expressed in this article do not necessarily reflect the views or policies of the U.S. Department of State.