Washington braced for IMF protests

Anti-globalisation and anti-war demonstrators will form a volatile mix on the streets of Washington today as the world's top bankers gather to debate global development problems at the spring meeting of the International Monetary Fund and the World Bank.

The chaotic events in the Middle East are casting a shadow not just on the streets but on the deliberations of IMF and World Bank officials at the fund's Washington headquarters.

Mr James Wolfensohn, president of the World Bank, told reporters yesterday that the task of rebuilding in Palestinian territories had to begin urgently. There were no preconditions, such as a ceasefire for channelling reconstruction aid into Palestine territory, he said, and they were working on a new $1.7 billion (€1.91 billion) budget.

Much of the infrastructure built up with the help of $4.7 billion in aid since 1993 in Gaza and the West Bank, including buildings, computers and files, has been destroyed by Israeli forces, according to reports from the region.

Some 150,000 Palestinians had jobs in Israel and another 40,000 worked there unofficially, Mr Wolfensohn said. Their loss of income had the biggest impact on the region's economy.

The long-term solution had to be peace, trust and the interdependence of the economies, he said. Four protest marches are planned for today, with teach-ins, rallies, concerts and impromptu street theatre. Police yesterday removed litter baskets and benches from around the IMF-World Bank headquarters in case of trouble.

The two main protest groups are "Mobilisation to Stop the War", which includes many student organisations and opposes the US war on terrorism as a "war without end", and "Mobilisation for Global Justice", which contends that IMF and World Bank policies make problems worse in poor countries.

Inside the IMF something of a struggle for power is going on, with Mr Pedro Solbes, the EU's commissioner for economic and monetary affairs, urging the EU countries to unite to match the influence of the United States on decision making. Mr Solbes wants the EU to revamp its representation at the International Monetary Fund, so it would have power equal to the US. This would involve a single EU representative with more than 15 per cent of the vote, the percentage needed to have veto power. The US, the IMF's largest shareholder, with 17.2 per cent, is the only country with power of veto and has used it to dictate limits on the amount of funding available to the IMF.

Altogether the EU has 34 per cent of the votes. Major EU countries like Britain, Germany and France have full board seats but with less than 15 per cent for any one member, and other EU countries vote in various blocs.

Ireland is in a bloc which includes Canada and eight of the smaller Caribbean nations.

An IMF official said it was unlikely the EU nations would vote as one bloc before political unity was reached in Europe, and that Britian and Germany had reacted cooly to the proposal. The IMF would have to change its rules and that could be blocked by the US.

Mr Solbes proposed that the EU should reduce its 34 per cent voting rights, which would cut back the amount EU members could borrow from the IMF. But a a unified stake of at least 15 per cent would give the EU the political clout to match the US.