Clashes Over IMF Lending, Inside And Out
As protesters clashed with police on Washington's streets, U.S. Treasury Secretary Timothy Geithner urged world finance officials meeting near the White House on Saturday to provide more money to help countries wrung by the recession.
Geithner said major progress toward bolstering the International Monetary Fund "must be an important outcome of these meetings. The international community should act quickly."
More than 100 demonstrators angered by how world leaders have handled the economic crisis took on police outside the headquarters of the IMF and World Bank, which are holding their spring meetings this weekend.
Authorities used batons and pepper spray when activists tried to march onto a prohibited street, and several people were pushed to the ground by police. The protesters swarmed officers unexpectedly, and police had to respond, said D.C. police Capt. Jeffrey Harold.
In early April, leaders from the Group of 20 developed and emerging nations pledged to provide $1.1 trillion in new resources to international lending institutions, including $500 billion for the IMF. 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 has not yet been pledged.
The additional money could aid countries in Latin America, Eastern Europe and elsewhere that are reeling from sharp drops in exports and foreign investment. Such countries increasingly are relying on IMF lending to make up for the lost funds.
But divides emerged this weekend over how to provide the extra money. Emerging economic powers such as China, Russia, Brazil and India are insisting that the United States, France, Britain and other old-line powers listen to their ideas on different funding approaches.
They want the IMF to consider issuing bonds as a way to raise the support. The countries would buy the IMF bonds rather than extending the support in loans.
The debate is tied up in demands the emerging economies are making for a greater say at the IMF - at the expense of the current power structure that favors the U.S. and Europe.
Bonds would be a temporary way to provide the IMF with extra resources "without undermining the reform process," said Brazil's finance minister, Guido Mantega.
The IMF has never issued bonds before, although the idea was explored in the 1980s. Both the bonds and loans would require the IMF to pay interest.
Outside the meetings, held a few blocks from the White House, 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.
Protesters claimed police responded without warning.