WASHINGTON (AFP) - With the global economy under threat from rising oil prices and sharp regional growth differences, the International Monetary Fund appealed to governments to act boldly to preserve a worldwide recovery.
"The world economy is strengthening but the recovery has been uneven," British Chancellor of the Exchequer Gordon Brown said after a meeting 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 committee in a final statement 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 Saturday.
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.
He pointed in particular to a statement adopted here Friday at a separate meeting of top financial officials from the Group of Seven, describing it as "very significant progress."
The G7, comprised of Britain, Canada, France, Germany, Italy, Japan and the United States, said it was committed "to addressing the sustainabilty of debt of the poorest countries" and would prepare a progress report by the end of the year.
The IMF committee in its statement took aim at three factors clouding the horizon for the world economy, which is projected to expand five percent this year before losing steam in 2005 in the face of oil market volatility.
It said in effect that the United States had to take steps to reduce its gaping budget deficit, which tends to drive up interest rates as Washington borrows money to finance the shortfall, while Europe and Japan needed to implement macroeconomic reforms to boost growth.
A third problem highlighted by the committee was the need for greater currency flexibility in Asia, notably China where a peg with the dollar is seen as undervaluing the yuan and thereby distorting regional trade.
The three factors have contributed to imbalances in the world economy, with the United States and Japan growing about twice as fast as the eurozone this year.
"The committee considers that bold reforms on a wide front are needed to strengthen fiscal positions, removal structural impediments to growth, support the correction of global imbalances, reduce financial and corporate vulnerabilities and accelerate poverty reduction," the statement said.
Brown also issued a strong appeal to the world community to move more decisively toward meeting the 2000 United Nations Millennium Development Goals, which aim to halve the proportion of people living in poverty by 2015.
"We know they cannot be met with existing resources," he said. "But the world community must make a decision about how it is going to keep its promises, redeem the promises it has made, bridge the gap ... between the rhetoric of 2000 and the reality we see in 2004," he said at a press conference following the meeting.
After separate discussions Saturday, the World Bank's Development Committee appealed to all countries, developed and developping, to take an active role in WTO multilateral trade liberalization talks scehduled to wrap by the end of the year.
It stressed the "the importance of translating recently agreed WTO frameworks into tangible results."
The World Trade Organization's ruling General Council in early August salvaged floundering trade talks with the adoption of an accord setting out the path ahead for the deadlocked round.
The breakthrough was aimed mainly at eventually securing a cut in agriculture subsidies -- notably in the United States and the European Union -- and lowering barriers to the multi-billion-dollar farm trade.
Prior to the agreement, the Doha round, launched at a WTO ministerial meeting in the Qatari capital in December 2001, had been close to collapse in disputes over the pace at which farm subsidies would be eliminated.
With the process restored, the World Bank committee on Saturday urged "all countries, developing and developed, to participate fully in the negotiations."