'Globalisation requires co-operation'

World Bank boss James Wolfensohn says protestors are asking legitimate questions

By BBC News Online's Steve Schifferes in Prague

The International Monetary Fund (IMF) has mounted a strong defence of its policies, saying that economic globalisation requires more co-operation - and the institutions to organise it.

If the IMF did not exist already, this would be the time to invent it

Horst Koehler, IMF Managing Director

However, the annual meeting of the IMF and the World Bank, held in the Czech capital Prague this year, is marred by large demonstrations outside the conference centre. The protesters say both organisations are actually worsening the life for many poor people in developing countries.

In an attempt to beat protester's plans to disrupt the meeting, Czech police took the delegates from 182 countries to the conference centre as early as 0500 local time.

The IMF's new managing director, Horst Koehler, tried to answer the critics of globalisation in his opening speech.

"I am aware of the critical debate about globalisation, and many questions raised have to be of concern to all of us. But I also want to be clear: if the IMF did not exist already, this would be the time to invent it. More than ever, globalisation requires co-operation, and it requires institutions which organise that co-operation."

'Legitimate questions, but...'

Demonstrators say rich countries should forgive debts of poorest nations

And James Wolfensohn, the president on the World Bank, told the conference he had a certain sympathy with the protesters.

"Outside these walls young people are demonstrating against globalisation.

"I believe deeply that many of them are asking legitimate questions, and I embrace the commitment of a new generation to fight poverty.

" I share their passion and their question, but I believe we can move forward only if we deal with each other constructively and with mutual respect."

The annual meeting is chaired by Czech President Vaclav Havel and South Africa's Finance Minister Trevor Manual.

World's oil crisis

Meanwhile, finance ministers attending the meetings have been grappling with turbulence on the world's currency markets and worries about the effect of high oil prices on economic growth.

They have agreed measures to boost the euro, which has fallen recently to record lows.

Mr Koehler welcomed the move as a demonstration that the rich countries are taking their responsibilities for managing the world economy seriously, and called on them to open their markets further to products from developing countries.

Bono: Wants people's concerns addressed

Earlier the IMF offered some hope to developing countries who are likely to be hardest hit by the oil crisis, saying that they would show more flexibility on debt relief, and confirmed that they were determined to grant partial debt relief to 20 countries by the end of the year.

But the move disappointed campaigners who have been pressing for an agreement to abolish 100% of the debts owed by the world's poorest countries.

Rock star Bono of U2, who is attending the meeting to press for debt relief, condemned any violence but said that people's concerns needed to be heard and addressed.

He urged ministers to go further to provide debt relief to alleviate what he called a "holocaust" in poor developing countries, with 19,000 children dying each day.

"We can't seem to get people to treat this as a state of emergency. In a crisis, in a state of emergency, you just deal with it now," he told the BBC.