The International Monetary Fund stands ready to help riot-torn Egypt rebuild its economy, the IMF chief said Tuesday as he warned governments to tackle unemployment and income inequality or risk war.

As Egyptian protesters gathered in their thousands demanding the departure of President Hosni Mubarak, Dominique Strauss-Kahn said: "The IMF is ready to help in defining the kind of economic policy that could be put in place."

In a speech in Singapore, he said rampant unemployment and a growing income gap was a "strong undercurrent of the political turmoil in Tunisia and of rising social strains in other countries".

For the global economy as a whole, Strauss-Kahn struck a worried tone. "While the recovery is under way, it is not the recovery we wanted," he said.

He said the different pace of recovery between advanced and emerging economies was unbalanced and echoed the situation just before the global economic crisis struck in late 2008.

"While growth remains below potential in the advanced economies, emerging and developing economies are growing much faster - and some may soon be overheating," he said.

For Asia in particular, Strauss-Kahn warned there were "risks of overheating and even a hard landing", underscoring the dilemma for policymakers trying to keep a lid on inflation.

"Food prices are rising too... with potentially devastating consequences for low-income countries," he added.

Agence France-Presse

(China Daily 02/02/2011 page4)