Ministers discuss oil prices

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WASHINGTON (AP) – Finance ministers endorsed proposals Sunday intended to make it easier for international lending institutions to deal with soaring oil prices, trade gaps and other problems that threaten to derail growth.

The policy-setting committees for the 184-nation International Monetary Fund and the World Bank told the World Bank to attack corruption and directed the IMF to explore ways to give tougher policy advice to member countries in such areas as budget deficits and currency values.

Oil prices, now at a record $75-plus per barrel, were among the developments causing officials from Europe, the United States and other countries at the institutions’ weekend meetings to worry about the prospects for long-term growth.

With U.S. pump prices already above $3 per gallon in some places, the White House is under pressure to act. On Sunday, for example, the chairman of the Senate Judiciary Committee said the government should consider a tax on oil companies if they make excessive profits.

In talks that wrapped up Sunday, ministers resolved a dispute over anti-corruption efforts by pledging “to improve governance in all countries.”

Some European nations complained that the World Bank’s president, Paul Wolfowitz, was emphasizing the fight against corruption at the expense of poverty reduction. The former top Pentagon official began his five-year term in June.

Wolfowitz told a closing news conference that he was satisfied with how the debate was resolved.

“These are complex and nuanced issues, but we must develop a common approach if we want to deliver results for the poor,” he said. “It is an effort that will take some time.”

The Bush administration says it’s critical to crack down on corruption so that the U.S. is assured its dollars supporting the bank are not wasted.

“With billions of people still living in destitute conditions, we cannot rest,” Treasury Secretary John Snow said. “We must do more to make these ideas and programs even more productive, beneficial and effective.”

On the issue of oil, the world’s seven wealthiest industrial countries met Friday night with three big oil-producing countries – Saudi Arabia, Russia and the United Arab Emirates – to explore ways to improve data about production and reserves to give oil markets better information. The G-7 countries also called for increased investment in exploration and refinery capacity to boost supplies.

The meetings went ahead without any of the large-scale demonstrations that in years past have filled the streets around the IMF and World Bank headquarters, a few blocks from the White House. This year’s events were on a small scale; one man among a group of 30 protesters was arrested Saturday and charged with carrying a stun gun.

Getting the go-ahead at these meetings was what supporters hope will prove a broad overhaul of IMF operations. Proposals include giving rapidly growing economies such as China, South Korea and Mexico greater voting power.

The U.S., with the world’s largest economy, has the largest voting share, about 17 percent. The administration has said it would go along with reallocating votes. But many nations in Europe, which now holds seven of the 24 seats on the IMF’s executive board, are resisting.

That issue is on the agenda for the IMF’s annual meetings in Singapore in September.

There, the policy-setting committee also will review recommendations from Managing Director Rodrigo Rato on how the IMF can advise countries on reducing trade imbalances, including America’s soaring deficit, and addressing other problems before they get out of hand, threatening the markets.

On the flip side of America’s trade deficit are huge surpluses in China and in oil-producing nations such as Saudi Arabia.

The U.S. wants more forceful IMF lecturing to countries about the value of their currencies; this is seen as a way, for example, to pressure China to allow its currency to rise in value against the dollar.

U.S. manufacturers contend China is manipulating its currency to keep it low, making Chinese goods cheaper and more attractive to U.S. consumers, and American products more expensive in China.

President Bush failed to win new commitments on the issue when Chinese President Hu Jintao visited the White House on Thursday. The U.S. trade deficit with China was at a record $202 billion last year.

Anti-poverty activists were disappointed the meetings did not generate more momentum for the international goal of cutting poverty in half by 2015 and boosting aid to poor countries by $50 billion over the next four years.

“These meetings were disappointingly quiet in terms of fulfilling those commitments,” said Max Lawson, policy adviser for Oxfam International, a global relief agency.

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