Global rich-poor country divide widening - U.N.

GENEVA, June 30 (Reuters) Inequality in incomes between rich and poor countries is growing and must be confronted to prevent global destabilisation, a U.N. report said on Friday.

In its annual World Economic Survey, released as trade ministers meet in Geneva to try to rescue troubled trade talks, the United Nations put part of the blame on the globalisation that the ministers want to intensify.

''By many measures, world inequality is high and rising,'' it said in the study.

The average Ethiopian is 35 times poorer than his U.S. or European counterpart, whereas in 1950 the income differential was a smaller 16 times, the survey said.

The average U.S. citizen has an income 27 times greater than that of the average Nepalese, whereas in 1950 the difference was only 19 times, according to the report compiled by the U.N.'s Department of Economic and Social Affairs.

''Most of the world's poorest nations are falling behind in more or less similar degrees,'' it said.

''The main reason is that, in the industrialised world, the income level for the last five decades has grown steadily, whereas it has failed to do so in many developing countries.'' The growing gap -- with a few emerging nations including China and India bucking the trend -- contradicted conventional wisdom that income differences would close as the world economy became more integrated, the report said.

''Rising global inequality is in part explained by the process of globalisation ... by imperfections that characterize global markets and which are inadequately countered by global policies and rules.'' Slower growth among the poorer countries ''obstructs the efforts to eradicate poverty and, in some contexts, this has been shown to be a major source of regional conflicts, domestic strife and social instability,'' the 185-page study said.

Supporters of trade liberalisation say open markets for goods and services -- the object of the Doha round of trade talks which were launched in 2001 to bolster the economies of poorer nations -- are key to reducing the poverty gap.

At the World Trade Organization in Geneva, ministers from about 60 countries, or nearly one third of its membership, are meeting this weekend to try to resolve sharp differences.

The survey appeared to challenge some liberal economic theory that argues that quick market opening and privatization can accelerate countries' prosperity.

A ''Big Bang'' approach to reform is not necessarily the best course.

''The experience of China and Vietnam indicates that incremental reforms, if credible and perceived as steps along the way to further change, can he highly effective in shepherding strong and sustained growth,'' it said.

REUTERS MQA VV2017