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'Globalisation means stronger IMF needed'

WASHINGTON: The push toward global markets demands stronger financial institutions to better manage the challenges, rather than the weaker structures demanded on the left and on the right, a senior IMF official said Saturday.

Throwing down the gauntlet both to free-market economists who want the International Monetary Fund to curb its lending and to anti free-market demonstrators who say fund policies worsen the position for the poor, IMF Deputy Managing Director Eduardo Aninat said the IMF needed a broader, not a narrower role.

"Globalisation is a new phenomenon which poses challenges to national sovereign governments, and that calls for more coordination, more surveillance, more standardisation of standards and codes and a more dynamic role for the World Bank, the other international financial institutions and especially the International Monetary Fund," Aninat told Reuters.

Aninat, who was Chile's finance minister before he joined the IMF last year, said ideas from a congressional commission that the IMF should restrict its lending to short-term emergency loans and the World Bank should concentrate on grand aid were "naive."

"It's exactly contrary to what we need to be doing," he said. "We need reforms, but we also need a stronger, more dynamic role."

SIEGE ATMOSPHERE

The spring meetings of the two Washington-based international lenders are taking place in a siege atmosphere as participants prepare for large-scale demonstrations on Sunday and on Monday, when ministers meet to decide on the institutions' priorities for the coming months.

A swathe of Washington immediately to the west of the White House is closed to the public and security is tight. Many staff have been told to stay home on Monday, or to come to work in casual clothes so they are not seen as targets by demonstrators.

But Aninat said activists, who are campaigning for help against AIDS, debt relief, efforts to combat poverty and for other issues like worker rights, had no clear message for the IMF.

"There is not an integrated, coherent message," he said. "I do not mean we do not have to tackle these issues, but I do wonder about trying to do them all together in an unholy bundle without any coherence or integration in a two-day summit which is related to financial issues."

The demonstrators say World Bank lending does not take enough account of human rights or the environment. Gay activists and dozens of other splinter groups are also promising to take part.

Aninat said curbs to the roles of the World Bank or International Monetary Fund would hurt the countries integrating with the global economy.

"If these institutions were to be limited, and their windows for lending and structural reform support and technical assistance handicapped or disrupted, then the losers are going to be the new users of these facilities, which are coming from Africa from Latin America and from the poorest sections of Asia," he said.-Reuters