The first day of the annual meetings of the World Bank and International Monetary Fund have ended in Singapore. Leaders of the two organizations expressed concern that high oil prices, global trade imbalances, and protectionism could disrupt economic growth. The best way to continue growth, they said, is to conserve energy and return to stalled world trade talks.
As the meetings began Tuesday, IMF chief Rodrigo de Rato warned that although the world economy and financial markets are strong, the outlook for future growth is not good.
He said energy conservation efforts were needed to combat high oil prices and lower inflation while action on deficits and currency exchange was needed to end global trade imbalances that could spark protectionism.
The chiefs of the IMF and World Bank also called on member countries to make efforts to re-start world trade negotiations suspended earlier this year.
World Bank President Paul Wolfowitz said all sides needed to compromise in order for progress to be made.
"The United States needs to accept further cuts in spending on trade-distorting agricultural subsidies," he said. "The European Union needs to reduce barriers to market access. And developing countries like China, India and Brazil need to cut their tariffs on manufactures."
De Rato and Wolfowitz also called for more aid for developing countries, especially in Africa, but said corruption was preventing development. Wolfowitz said good governance was the "fast-track" out of poverty and that without it all other reforms were meaningless.
But World Bank officials also urged the leading industrial nations to do more to fight corruption. They said developed nations should crack down on corrupt practices by multinationals in developing countries and should do more to help recover assets stolen from developing countries by corrupt officials.
Aid agencies and rights groups have worried that too much focus on preventing and punishing corruption could prevent poverty relief from going to the countries that need it most. The main effect of this, they say, is to hurt poor people living under corrupt governments.
World Bank officials say they will only pull out from projects when it is clear that corrupt officials will not make any efforts at reform.
Daniel Kaufmann, the director for Global Programs at the World Bank, says the anti-
corruption campaign should not be misunderstood.
"Basically, this new strategy is one of deeper, better, and stronger engagement and not one of disengagement," he noted.
World Bank officials say the anti-corruption campaign is not an anti-development campaign and that the two objectives of poverty relief and good governance are interlinked.
Wolfowitz says Africa would remain the Bank's number one concern for development.
Wolfowitz said there were signs of some progress with the number of African countries in conflict having declined from 13 to five in the last six years. But he said Sudan's conflict-ridden Darfur region was an exception.
"Darfur's desperate and poor are at risk of violent extinction. The international community must act soon and act decisively to end the violence," said Wolfowitz.
However, he said Sudan was a grim exception with the people in the Darfur region at risk of "violent extinction."
Aid agencies and activists have also called on the World Bank and IMF to give poor countries more say in how the two organizations are run and how money is spent.
Late Monday the IMF confirmed the 184 members voted approval of quota reforms that gave China, Mexico, South Korea, and Turkey more voting rights while increasing their contributions to the Fund.
The four countries were considered to have the most imbalanced quota considering the size of the countries' economies.