IMF opts to sell bonds for loans

The International Monetary Fund will sell bonds 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 a greater voice in the institution before providing additional resources.

World leaders in London this month 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 agreed there was a “break in the clouds” in the outlook for the global economy.

There are still tough times to come, he said, but the economy worldwide should start to stabilize by the end of this year, and recovery could kick in by the end of the first half of 2010.

Last week the IMF said the global economy was likely to shrink by 1.3% this year, the first such decline in six decades.

Meanwhile, more than 100 protesters upset with the handling of the economic crisis clashed with police Saturday outside the IMF and World Bank meetings in Washington.

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 Herold. Protesters said police responded without warning.

A 22-year-old man accused of using pepper spray on an officer was arrested, D.C. police said.

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.