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IMF, World Bank plan reforms |
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April 14, 2000
WASHINGTON, APR 13 (AP) - The International Monetary Fund and World Bank say they are responding to growing calls for reform demanded by their member governments, aid agencies, churches and activists who oppose economic globalization.
The IMF and the bank, which lend billions of dollars each year to poor and middle income nations, have come under increasing pressure in recent months to pay more attention to the effects of their policies.
Stanley Fischer, the acting head of the IMF, and Treasury Secretary Lawrence Summers are expected to address some of these concerns at briefings Thursday in advance of the two institutions' spring meetings, scheduled to begin this weekend.
Anti-globalization activists have threatened to shut down the sessions with protests similar to ones staged in Seattle in December to disrupt meetings of the World Trade Organization.
Fischer says the IMF has a full agenda of reform proposals for the finance ministers and central bankers from 182 nations expected to attend the sessions.
In recent weeks, the IMF has agreed on measures to strengthen surveillance of the world economy so it can head off future financial crises. These include establishing an independent evaluation unit and adopting tougher auditing standards for countries seeking to borrow money.
"I hear people saying nothing is happening at the IMF," Fischer told reporters last week. "That is just not true. We've been working on a lot of changes." James Wolfensohn, the president of the World Bank, the IMF's sister institution, on Wednesday rejected proposals made by a congressional advisory committee and other critics that the role of the bank and IMF should be curtailed sharply.
Wolfensohn said he was dismayed at the prospect of thousands of demonstrators calling for the bank and fund to be shut down because poor countries need more help than ever before.
The IMF-World Bank protesters believe the institutions impose severe penalties on the poor countries they help with loans and economic bailouts. The demonstrators say the countries must devote so much to debt repayment that there's nothing left for desperately needed social programs.
"Of course I'm concerned by the noise outside," Wolfensohn said. "It would be impossible not to be affected."
As he spoke, police outside erected iron crowd control barriers and restricted access to the headquarters of the bank and the IMF, two blocks west of the White House.
In its twice-yearly report on the state of the world economy, the IMF said Wednesday the rapid growth many countries were experiencing should continue for the rest of 2000 as long as an overheated U.S. economy does not derail the good times.
The IMF said in its new World Economic Outlook that "global economic and financial conditions have improved dramatically" over the past year, helped by strong recoveries in many of the Asian countries that had been leveled by a global currency crisis in 1997-98.
In its economic outlook, the IMF revised up its projection for growth in the world economy to 4.2 percent, the strongest showing since a 4.7 percent growth spurt in 1988, with world output projected to post a healthy 3.9 percent increase in 2001.
But to underscore its worries, the IMF produced an alternative, "harder landing" scenario in which U.S. growth was stronger this year, forcing the Federal Reserve to boost interest rates more than currently anticipated and producing a mild recession in the United States next year and weaker global growth over the next four years.
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