IMF calls for global recovery vigilance

IMFC: Economic prospects have improved markedly

David Schepp BBC News Online North America business reporter

Finance ministers meeting in Washington have said rich countries have a responsibility to ensure "a strong and sustained world economic recovery."

The decision was made in the face of increasing evidence that a US-led recession is now in retreat.

Developed nations must do so while being hawkish on inflation and navigating risks such as rising oil prices and threats of further terrorist activity, members of a committee of the International Monetary Fund (IMF) said on Saturday.

Brown: Global economy has improved markedly

When they last met in the autumn, finance ministers who comprise the International Monetary and Financial Committee (IMFC) of the IMF expressed grave concern over the possibility of a worldwide recession.

"It's thanks to decisive action by policy makers around the world and the stressing of international cooperation that over the last six months these fears have not been realised," said Gordon Brown, the UK's chancellor of the exchequer who chaired Saturday's meeting.

Mr Brown noted that since the IMFC's last meeting in Ottawa the prospects for the global economy "had improved markedly".

In issuing its upbeat outlook, the committee nevertheless underscored the importance of stability in oil markets "at prices reasonable for consumers and producers".

Up to date reforms

In issuing a communique following the meeting, members of the IMFC agreed to continue working "together for sustained, broad-based growth... [and] opening up our economies for trade."

We are talking about a wider package of reforms to create an international financial system for the 21st Century that recognises the realities of open and not sheltered economies

Chancellor of the Exchequer Gordon Brown

This year's spring meetings of the IMF and its sister organisation, the World Bank, have been characterised by stressing a need for boosting trade opportunities especially those among poor nations.

The committee said more open trade is of vital importance for developing countries to achieve sustainable growth.

The committee also said more needs to be done to prevent economic crises and encouraged the IMF to be flexible in its approach to resolving them.

"We are talking about a wider package of reforms to create an international financial system for the 21st Century that recognises the realities of open and not sheltered economies," Mr Brown said.

Combating terrorism

The committee also backed the Monterrey Consensus, a series of proposals made in March that promote sound economic policies in developing countries.

It is hoped such policies will help poor nations achieve the United Nations' Millennium Development Goals (MDG), which seeks, among other things, to reduce by half the number of those living in poverty by 2015.

Mr Brown said the committee's meeting "laid the steps for going further and faster" toward the Millennium Development Goals and that poorer countries should not be held back from achieving those goals due to lack of financing.

Following its meeting, the IMFC also said combating money laundering and the financing of terrorism remains a priority and was encouraged by the response of many nations in freezing assets and setting up intelligence units.

The IMFC is next scheduled to meet at the end of September in Washington.