UNITED NATIONS, March 1: A UN commission seeking to enlist local businesses in the global war on poverty urged developing nations on Monday to pursue policies that encourage savings, investment and innovation.

"The private sector can alleviate poverty by contributing to economic growth, job creation and poor people's incomes," the panel reported. "It can also empower poor people by providing a broad range of products and services at lower prices," said the panel headed by Canadian Prime Minister Paul Martin and ex-Mexican President Ernesto Zedillo.

Local businesses in impoverished nations are typically overtaxed and over regulated, the commission found, recommending that governments ease the burden on entrepreneurs trying to start up a company and cope with myriad regulations they are required to meet.

In Angola, for example, it now takes 146 days and $5,531 - more than eight times the average per capita income - to start a business, compared to $28 - far less than 1 per cent of the per capita income - in New Zealand.

Impoverished countries and the international agencies trying to help them develop can encourage private-sector development "only by fostering properly functioning competitive markets," the panel said.

Martin, in a statement, said the panel focused on the need for new and innovative partnerships between governments and small and medium-sized businesses, which he said would "contribute significantly to the creation of jobs and prosperity for the least advantaged where it really counts - in their local communities."

UN Secretary-General Kofi Annan launched the commission last July, asking it to report back to him on how to build strong local private sectors in poor countries.

Annan said poor nations were falling short of U.N. demands for more foreign aid, increased trade and greater private sector investment, preventing them from achieving ambitious goals set for them by the United Nations at a 2000 summit.

The so-called Millennium goals, to be achieved by 2015, range from halving the proportion of people living on less than a dollar a day to primary schooling for all children to reversing the spread of AIDS. -Reuters