WASHINGTON, Sept 29: Globalization must be made to work better for the world’s poor, International Monetary Fund chief Horst Koehler said on Sunday on the final day of the IMF-World Bank annual meeting.

World Bank President James Wolfensohn, also addressing the full 184-member session, said a world in which 15 per cent of the people control 80 per cent of the income is “unsustainable”.

“The quest for a more equal world is the quest for long-term peace — something that military power alone can never achieve,” Wolfensohn said.

The world’s economic chiefs wrapped up meetings saying more needs to be done to sustain a global recovery staggering from stock market turmoil, a feared war in Iraq and crises in Latin America.

Global growth was disappointing but would strengthen soon, policymakers said.

“Our most immediate concern must be to strengthen the global economy,” Horst Koehler told finance ministers and central bankers of the 184-member International Monetary Fund and World Bank Sunday.

“There are clearly a number of risks and uncertainties. But we should beware of undue pessimism. There are still good reasons to expect that the recovery will continue,” he said.

To ensure recovery the finance ministers and central bank governors called for:

— Japan to mop up the bad debts weighing on its banking system.

— Europe to reform its labour markets.

— The United States to clean up corporate boardrooms.

— Plans for new bankruptcy-style system to deal with countries in debt crises, such as Argentina.

Police sealed off streets surrounding the downtown Washington buildings housing the World Bank and International Monetary Fund, as an estimated 5,000 anti-globalization activists, many banging drums, marched against policies they feel have hurt the poor.

Inside the meetings, policymakers tried to maintain an upbeat outlook.

“The committee observes that the global economic recovery is proceeding, although at a slower pace than expected earlier this year,” the International Monetary and Financial Committee said in a statement.

“Growth is expected to strengthen in the near term, supported by a strong policy results across the international community,” it said.

The policymakers stressed the importance of stable oil prices, which have climbed in past weeks amid mounting speculation of a US military strike against Iraq. In the advanced economies, growth generally was expected to strengthen, the committee said.

“However, monetary policymakers should remain ready to respond to developments where necessary and to ease policy further if the risk of economic weakness intensifies and inflation prospects remain subdued,” the statement said. In Japan, monetary easing would help end deflation, it said. Emerging markets had been mixed, said the statement.

“While growth in Asia has picked up strongly, several economies in Latin America, in particular, are facing a deterioration in conditions due to external developments, country-specific vulnerabilities and policy uncertainty.”

Emerging economies should stimulate growth if they had the economic elbow room, the statement said. Otherwise, they should take steps to restore confidence.

The policymakers drew a distinction between Brazil, which received a record 30 billion-dollar IMF rescue line, and crisis-torn Argentina, which is still struggling after nine months of negotiations to come up with an IMF-agreed economic reform programme.

“The committee welcomes Brazil’s commitment to sound policies,” the statement said.

The policymakers instructed the IMF to draw up a sweeping new plan to deal with countries facing debt crises by introducing a bankruptcy-style system that would freeze creditors’ claims during the restructuring.

Group of Seven policymakers, who met Friday, supported this effort as well as an initiative to insert new clauses into bond contracts issued by countries.—dpa/AFP