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Finance ministers address oil prices, trade gaps, currency

WASHINGTON -- Finance ministers endorsed proposals yesterday 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 places at the institutions' weekend meetings to worry about the prospects for long-term growth.

With US pump prices already above $3 per gallon in some places, the White House is under pressure to act. Yesterday, 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 yesterday, ministers resolved a dispute over anticorruption 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 Pentagon official began his five-year term in June.

Wolfowitz told a closing news conference that he is 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 United States 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.

Antipoverty activists expressed disappointment that more was not accomplished toward meeting the UN-sanctioned goal of cutting poverty in half by 2015.

''By their next meeting, we want to see real change -- not just pocket change -- for the 100 million poor children out of school," said Max Lawson, policy adviser for Oxfam International.

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

The United States, 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.

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