WASHINGTON — The International Monetary Fund will sell bonds as a way to raise funds to lend to struggling nations, the head of the organization said Saturday, in a victory for developing countries.
Emerging economies such as China, Brazil and India pushed for the move as an alternative to providing longer-term loans to the IMF. Those countries want greater voice in the institution before providing additional resources.
World leaders meeting three weeks ago in London pledged to boost an IMF emergency lending facility by $500 billion, but finance officials meeting in Washington disagreed on how to best provide the funds.
The IMF also said in a communique issued after its annual spring meeting that member nations had committed to cleaning up their banking systems and taking steps to boost their economies through increased government spending.
In addition, Youssef Boutros-Ghali, chairman of the IMF's policy setting committee, said IMF members agree there is a "break in the clouds" in the outlook for the global economy, which is currently mired in its toughest downturn in decades.
While there are still tough times to come, he said, the global economy should start to stabilize by the end of this year and recovery could kick in by the end of the first half of 2010.
Earlier this week, the IMF said the global economy is likely to shrink by 1.3 percent this year, the first global decline in six decades.
In remarks earlier Saturday, Treasury Secretary Timothy Geithner urged world finance officials to follow through on pledges made at the London summit April 2 to provide an extra $1.1 trillion to the IMF and other international lending institutions. That amount includes $500 billion for the IMF lending facility.
Geithner said major progress toward bolstering the IMF "must be an important outcome of these meetings. The international community should act quickly."
President Barack Obama is seeking congressional approval for up to $100 billion, matching commitments for the same amount made by Japan and the European Union. But the full $500 billion hasn't yet been pledged.
Outside the meetings, held a few blocks from 1600 Pennsylvania Ave., more than 100 protesters upset with the way world leaders have handled the economic crisis clashed with police.
A 22-year-old man accused of using pepper spray on an officer during the scuffle was arrested. Before the demonstrations began, police arrested six people and accused them of vandalizing two banks, an incident that authorities think was linked to the protests.
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