By Alex Kirby
BBC News Online environment correspondent
The leader of Catholics in England and Wales, Cardinal Cormac Murphy-O'Connor, says the biggest challenge confronting the world is not terrorism but poverty.
Dire poverty "is the greatest scandal"
He told a conference called by the UK Treasury that poverty was humanity's "greatest scandal and scourge" today.
The cardinal said the world risked getting its definitions and priorities wrong by concentrating on terrorism.
Failed states, he said, were those that could not lift people out of poverty, or share wealth so all could flourish.
The UK Chancellor Gordon Brown earlier told the conference, Making Globalisation Work For All, that the developed world was failing in its promises to reduce global poverty and sickness.
Recognising the peril
He called on governments to give an extra £50bn ($94bn;74bn euros) in aid per year, and said countries must open their markets to competition more quickly, cut protectionism and write off larger amounts of Third World debt.
The presidents of Brazil and the World Bank and the singer Bono backed his stance.
Cardinal Murphy-O'Connor, the archbishop of Westminster, said he did not want to belittle "the terrible scourge of terrorism, or the truth that it is more dangerous today than it has ever been".
He continued: "There is increasing talk of so-called 'failed states' - states within which the kinds of controls and regulations which allow for an orderly and secure environment are not present.
"We point the finger at such states because we fear that it is there that terrorism is allowed to flourish.
"This worries me somewhat, not because it is not true, but because we may be at risk of getting our definitions and our priorities wrong.
Cardinal Cormac Murphy-O'Connor
"States fail when they are incapable of lifting people out of poverty, or when they pay insufficient heed to the importance of ensuring that wealth is adequately distributed so that the whole of the population can flourish.
"Indeed, they fail when they do not take seriously the obligation to ensure that wealth is not created for the few and at the expense of the many.
"The greatest scandal and scourge of humankind is, in fact, dire poverty and the misery and exploitation that accompanies and exacerbates it. That is the real scandal... there is a genuine recognition that this is the big issue for our times."
The cardinal said the world faced a huge task if it was going to achieve the United Nations Millennium Development Goals, which set targets for realising a better world in several areas including hunger, peace and health, many by 2015.
The World Economic Forum said a month ago that developed countries were doing scarcely a third of what was needed to achieve the goals.