The head of the World Bank warned here Sunday that the global war on terror could divert resources from fighting poverty and might pose another risk to a promising global recovery.
"This year, we are celebrating record economic growth," World Bank President James Wolfensohn said. "And yet, somehow, we feel less secure about the future."
Pointing to the unprecedented security zone in the blocks surrounding the Washington DC headquarters of the Bank and the International Monetary Fund, he said "terror has come to our door," citing a reported threat against the two bodies detected last August.
But preoccupation with an immediate threat means that governments might "lose sight of the longer-term and equally urgent causes of our insecure world: poverty, frustration and lack of hope ... If we want stability on our planet, we must fight to end poverty."
The appeal by Wolfensohn came during the annual general meeting of the Bank and the Fund, attended by central bankers and finance ministers from many of the 184 members of the institutions.
Smaller IMF and World Bank policymaking committees ended a day of talks here Saturday.
The committees concluded that the global economy as a whole was in its best shape in three decades but was endangered by imbalances caused by currency distortions, sky-high oil prices and a host of other problems.
"The world economy has mounted a vigorous recovery from the slowdown of 2001," IMF Managing Director Rodrigo Rato said Sunday.
"This is a remarkable performance in the face of the shocks experienced in the past few years."
"The world economy is strengthening but the recovery has been uneven," British Chancellor of the Exchequer Gordon Brown said after a meeting Saturday of the IMF's policymaking International Monetary and Financial Committee, of which he is chairman.
"And with oil prices doubling and imbalances worsening, we agreed that action must be taken to address risks to the recovery."
The IMF and World Bank annual meetings echoed the concerns of the Group of Seven economic powers, which on Friday was joined by China for the first time as a recognition of the increasing international weight of the Chinese economy.
The IMF also looked ahead to what it hoped would be funding for further debt relief earmarked for the world's poorest countries but made no mention of concrete measures having been approved.
But Brown cited a several proposed initiatives for more vigorous measures to ease the debt burden carried by developing countries, notably obligations to multilateral lending bodies such as the IMF and the World Bank.
"There is a growing consensus that multilateral debt relief has to be dealt with as soon as possible," Brown said.
The Chinese on Friday came under renewed pressure from the G7 to allow their currency, the yuan, to float freely.
IMF members "need to continue policy actions to have an orderly adjustment of current account imbalances," Rato said. "This is a global problem and the solution requires efforts by many countries."
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