IMF, World Bank Start annual economic Deliberations

IMF, World Bank Start annual economic Deliberations WASHINGTON, April 14 (KUNA) -- World's Finance Ministers and Central Bank Governors inaugurated the annual spring meetings of the World Bank and the International Monetary Fund (IMF) on Saturday seeking to reform the fund and redefine its role in emerging market economies and low-income countries.
Yet, the main distraction remains the controversy over World Banks President Paul Wolfowitz, days after media reports disclosed his involvement in directing a high pay raise for a close senior bank staffer.
The future of Wolfowitz as a top Bank official still uncertain, but US President George W. Bush reiterated yesterday his confidence in the principal architect of the Iraq war, as did US Treasury Secretary Henry Paulson.
The World Bank released yesterday a new document that further involves Wolfowitz in this matter.
Shaha Riza reportedly said she had to face a job transfer, in light of her relation with Wolfowitz.
She added that she went "on external assignment contrary to my wishes", referring to her temporary job in the State Department shortly after the former Deputy Secretary of Defense was appointed in the international organization.
World Banks staffers are pressing Wolfowitz to step down.
Eleven Arab ministers are attending the joint spring meetings, including Egyptian economic Minister Yousef Boutros Ghali, United Arab Emirates Minister of State for Finance and Industry Mohammed Khalfan Bin Khirbash, Bahrain Minister of Finance and National Economy Abdulla Bin Husain Saif, and Saudi Minister of Finance and National Economy Ibrahim bin Abdulaziz Al-Assaf.
Attending the meetings as well Algerian Foreign Minister Murad Madlasi, Tunisian Minister of Finance Mohammad Rachid Kechiche, Moroccan Finance Minister Fathalla Oualalou, and the Libyan Secretary for Finance Ahmed Abd al-Hamid Munaysi.
Iraqi Finance Minister Bayan Jabr is in Washington seeking financial aid from the International Community to contribute in the reconstruction efforts and to curb the growing rates of inflation.
Iraq is pledging to address the spread of corruption and hoping to resolve the remaining debts from the previous regime of Saddam Hussain.
In July 2006, the United Nations launched the International Compact for Iraq, a five-year plan and a forum for International donors to boost reconstruction in post-war Iraq.
Lebanese Finance Minister Jihad Azur and Minister of Economy and Commerce Sami Haddad are here to attend later today the high-level international task group for Lebanon, a follow up of Paris-III Conference, the third round of international donors to help Lebanon to restructure its public debt and fund its development projects in the aftermath of the July 2006 war.
The Palestinian Finance Minister Salam Fayyad will try to create a breakthrough in the aid blockade strangling the Palestinian economy, as the international community continues to boycott Hamas officials due to their stand in not renouncing violence and recognizing Israel.
Following his talks with the European Union last Wednesday, Fayyad signaled the alarm over a possible "devastating" humanitarian crisis if the international community did not provide soon at least USD 1.3 million in aid for the Palestinian authority.
Irans Minister of Finance and Economic Affairs Davoud Danesh-Jafari arrived to Washington to take part in the deliberations.
The Regional Economic Outlook on the Middle East, released by the IMF, said that oil exporters in the region had a "solid growth" in 2006 despite the decline in oil prices since last August.
Countries of the "Mashreq" region had an accelerated growth in 2006 due to increase in Foreign Direct Investment and "a favorable external environment".
The report forecasted a two-year setback in the regional account surplus to nearly 11 percent, down from 18 percent in 2006, due to decline in oil prices and stronger import growth.
"Middle Eastern oil exporters remain heavily dependent on the hydrocarbon sector", said the report.
Unemployment rates in those countries are intensifying due to steady increase in population.
The report praised the 700 billion five year investment plans of the Council of Gulf Countries (GCC) to address this concern.
The plenary session of the fifteenth meeting of the International Monetary and Financial Committee (IMFC) started this morning at the Funds headquarters in Washington. Current Arab membership of IFMC includes Algeria, Saudi Arabia and United Arab Emirates.
The IMFC, established in 1999, will adopt a revised surveillance framework to monitor the domino effect of financial crisis from one country to the other, instead of focusing solely on internal financial crisis.
The industrial wealthiest Group of Seven Finance Ministers and central bank governors had met yesterday ahead of the joint spring meetings between the IMF and the World Bank urging to speed up the trade talks of Doha Round.
A leak draft of Group of Eight Summit Declaration, made public yesterday, said that G7 and China leaders are considering an initiative to face climate change in their upcoming summit in Germany. Yet, this draft ignores any mention of hundreds of billions of dollars in fossil fuel subsidies.
China is under pressure to use a floating currency rate opening the door for more competitiveness in the international market. China sent a low-level delegation for the meetings in return.
The Group of 24 developing countries raised concerns about the decision making process in the IMF and World Bank, calling for more inclusive representation and voice for developing countries. Argentinean Finance Minister Felica Miceli, the Ghairman of G-24, said yesterday that this issue "remains the utmost importance for the legitimacy and effectiveness".
The IMF adopted last year in Singapore an increase in the voting share including countries like China, South Korea, Turkey and Mexico; a long awaited process for many countries.
Deputy Minister of Finance of the Russian Federation Sergei Storchak expressed his concern about the performance of the US economy during his speech today in the IFMC. "There remains substantial uncertainty regarding future developments in the US economy", he said. Russia did not support the new quota formula of voting shares. "A formula that possesses all the same shortcomings", said Storchak. (end) jm.bs KUNA 141921 Apr 07NNNN