High oil prices are likely to last, says IMF Chief

Washington, Apr 21 (UNI) Ahead of the spring meetings of the World Bank and International Monetary Fund (IMF), IMF Managing Director Rodrigo de Rato warned that the record surge in oil prices is likely to stay and may lead to inflation affecting the global growth rate.

Appealing the world leaders to address the widening imbalance in the world economy, Mr De Rato said rising oil prices are primarily being driven by supply and geopolitical concerns.

He said there seems to be a broad consensus among policymakers on measures needed to reduce global economic imbalances, including stimulating domestic demand in Asia and private savings in the United States.

The IMF chief said the IMF's estimated global growth rate for 2006 -- of above four percent -- could also be jeopardized by global economic imbalances, rising interest rates and a potential bird flu pandemic.

The spring meetings scheduled for April 22-23 in Washington will address how to meet the energy needs of the developing world in an environmentally friendly manner.

The meetings will also focus on how international aid donors can impress on developing countries the importance of improving governance.

''Governance requires more than technical skills. It demands clear rules and expectations... it demands transparent information and incentives and enforcement to reward success and penalise failure,'' the World Bank President Paul Wolfowitz said.

The joint World Bank/IMF Development Committee plans to review promoting good governance, strengthening mutual accountability of how aid is spent and dropping barriers to trade, according to Mr Wolfowitz.

The committee discussion will be based on a 2006 Global Monitoring Report issued on April 20.

Mr Wolfowitz said there has been progress in reducing poverty and improving the lives of people in developing countries but added that progress continues to be uneven. Nearly 1.6 billion people in the world do not have access to electricity and almost 2.4 billion rely on agricultural byproducts to heat their homes and to cook, he said.

However, he said, the rate of HIV/AIDS in some countries, which have had a high prevalence of the disease is dropping, with reductions occurring fastest among poorer households.

Nine of 10 countries surveyed for the report, recorded decrease in child mortality and 50 developing countries have achieved universal primary school education, he said.

''It (the report) shows therefore that development efforts can deliver results, particularly when governments pursue good policies and when the international community aligns assistance with country-owned development strategies,'' Mr Wolfowitz said.

The World Bank President also announced the creation of an independent international commission to study and report on ways to improve economic growth and reduce poverty.

The commission will be chaired by Nobel laureate Michael Spence, former dean of the Stanford University graduate business school.

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