The joint annual meeting of the International Monetary Fund (IMF) and the World Bank ended on Sunday in Washington with some welcoming results including a plan to wipe out poor countries' debt.

During the meeting, the International Monetary and Financial Committee (IMFC),the policy-making body of the IMF, approved a plan that would finance the cancellation of 40 billion US dollars in multilateral debt owed by the world's poorest nations mostly to the World Bank and also to the IMF and the African Development Bank.

The plan represents progress after the world's seven richest countries plus Russia (Group of Eight -- G8) made their commitment in this regard several months ago. It was put forward by the G8 at a summit in Scotland in July.

Before its approval, the G8 plan had appeared to be in jeopardy as non-G8 countries expressed fears that the World Bank would not be fully compensated for foregone repayments and would therefore be unable to continue lending to poor countries.

But the G8 countries -- Britain, Canada, France, Germany, Italy, Japan, Russia and the United States -- issued a strong pledge on Friday to cover the costs to be caused to the World Bank by the debt cancellation, thus paving the way for the plan's endorsement in the meeting.

Chinese Finance Minister Jin Renqing said the G8 finance ministers' new debt relief initiative offers a very good opportunity for heavily indebted poor countries (HIPCs), particularly those in Africa, to achieve the Millennium Development Goals (MDGs). Meanwhile, he stressed that it is important for the rich countries to put their commitment into concrete action as soon as possible.

The meeting was held at a time when the world oil prices were hovering at record high levels and the stability of oil supply and oil prices was undoubtedly a major topic of the meeting.

In its latest World Economic Outlook (WEO) report released before the 2005 annual meeting, the IMF said the world oil prices have been revised up to 54.23 dollars per barrel for 2005 and 61.75 dollars per barrel for 2006, compared with 46.5 dollars for this year and 43.75 dollars for 2006 forecast in the last WEO report released in April.

These higher price forecasts reflect a growing consensus that recent levels of consumption are likely to be more persistent and will continue to tax available spare capacity, thereby amplifying the price effects of any exogenous supply shocks. The IMF listed the higher oil prices as one of the three major risks facing the world economic growth in the medium term.

During the meeting, the G-7 finance officials encouraged oil-producing countries to make available additional oil and oil products on the market and called for a sustained increase in supply by those with spare capacity. They also said oil-producing countries should ensure a favorable investment to increase the supply of oil and urged countries to explore alternative sources of energy and improve conservation efforts.

The IMFC also called for "further investment both now and in the long term throughout the supply chain, particularly in refining capacity including of heavy oil" and for efforts to create a favorable investment climate.

"Oil producers, oil consumers, and oil companies will all have their part to play in working together to promote greater stability in the oil market," the IMFC stressed.

On the world trade negotiations, many countries were worrying about the increasing protectionism in some rich countries. The IMF's WEO report also said another risk to the global economy is that protectionist sentiment is rising, driving by global imbalance and growing fears of emerging market competition. The removal of quotas on the textiles and clothing has also triggered protectionist sentiment in many countries.

Many nations, especially the developing nations, stressed the importance of finishing the Doha Round negotiation successfully at the end of next year. They also stressed the need to make progress in the multilateral trade negotiations and called for a strong political commitment by developed countries to this end ahead of the ministerial meeting of the World Trade Organization to be held in Hong Kong in December.

"Improved access to industrial country markets -- particularly through a reduction of tariff and non-tariff barriers and the phasing out of agricultural and other subsidies -- will benefit all countries, and will help promote trade liberalization among developing countries," the G24 said in a communique.

The international community welcomed the fact that the meeting achieved some results. But it also expressed the hope that the pledges made by all sides, especially by the rich countries, will be translated into action.

Source: Xinhua