Speaking at the formal opening of the annual meeting of the International Monetary Fund and World Bank, the two leaders warned rich nations against turning their backs on the poor, and developing countries against trying to wall themselves off from an increasingly competitive and open world economy.
"The developing countries deserve our support for moral and social reasons," new World Bank President James Wolfensohn said. "But they also need our support because they represent future growth for us all."
Wolfensohn, who has only been on the job for four months, unveiled his new vision for the oft-criticized institution, calling for a compact between the bank, donor countries and borrowers to build a better future for the world's poorest.
He promised to break what he called the "armlock" that bureaucracy has placed on the 6,000-strong bank and hindered it from accomplishing its goal of eradicating global poverty.
IMF Managing Director Michel Camdessus told the meeting his organization was working on ways to prevent and contain future Mexico-style economic crises, where billions of dollars can flee countries at the flick of a computer switch.
On the surface, the world economy has not looked brighter for a long time.
Growth in the industrial countries is picking up after a pause earlier this year. Inflation is the lowest it has been in a generation. And many developing countries are doing better as well.
"World economic growth in 1995 will be at least as strong as in 1994, and 1996 could see the strongest growth in eight years," Camdessus said.
But the short-term outlook is clouded by a longer-term question: Is the only superpower turning its back on the rest of the world?
Eager to cut bulging budget deficits to ensure prosperity and freed of responsibilities for fighting the Cold War, the United States is turning its attention to domestic economic problems it has long ignored.
The immediate focus of concern at the annual meeting was the future of the International Development Association, an $18-billion World Bank affiliate that lends money to the world's poorest nations at no interest charge.
Tight-fisted U.S. lawmakers are poised to slash U.S. contributions to IDA, and other rich nations are threatening to follow suit. "If there is a seriously under-funded IDA, we will be faced with a world of increasingly unstable nations," Wolfensohn said. "Some of the ministers here today will have to abandon plans [for] increasing clean water supply ... or for moving soldiers out of barracks and into small farms."
Both Wolfensohn and Camdessus pledged to make best use of the money and resources they have to help countries cope with an increasingly complex world economy where $1 trillion changes hands every day on world currency markets.
Wolfensohn said the World Bank too needed to adjust to a vastly changed world, increasing its focus on end results, not just on lending volumes.
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