WASHINGTON. Oct 9: World financial leaders yesterday pledged urgent cooperative action to ward off a global recession in five days of talks here, but doubts remain as to whether they can turn the tide, reports AFP.

"We have undoubtedly moved a long way forward in identifying the steps needed to establish a more durable global economic system and for addressing the crisis.” IMF Managing Director Michel Camdessus told the closing session of the IMF and World Bank annual meeting here.

But none of it seemed to do much immediately to reassure investors, whose panic flight from emerging markets in the wake of the Asian crisis is now threatening Latin America.

There was certainly a change of mood from the interim meeting six months ago. as the world's industrial economies, and the IMF, publicly acknowledged that the current crisis could tip over into recession unless they took urgent action to-?[ether to get the world economy >ack on track.

US President Bill Clinton told financial leaders from more than 180 countries

Wednesday that the world economy faced its most serious challenge In half a century, issuing a strong call for "decisive action" from all countries to turn things around.

Ine IMF. in its forecast for the global economy issued ahead of the meeting, set the tone by slashing a third off its world growth predictions, to 2.0 per cent this year and 2.5 in 1999 from a May forecast of 3.1 and 3.7 per cent growth.

Finance ministers of the Group of Seven leading industrial nations took the message to heart Saturday, recognising that the "balance of risks" in the world economy had shifted, and stressing the need for all countries to cooperate and do their part to promote recovery.

US Treasury Secretary Robert Rubin said the meeting was "highly energised." with "a sense of energetic commitment to doing everything we can to get out of this crisis."

The twin themes of urgency and cooperation continued through the IMF and World Bank gatherings, as the financial chiefs grappled with what to do next to curb the current crisis ward off future turmoil.

Camdessus hailed this new

spirit of cooperation on Wednesday, saying "we must move to a higher level of international cooperation in striving urgently for effective solutions. very good progress has been made in these meetings."

Tlie G7 leaders agreed to take more action at home to help the global economy, notably by hinting at the possibility of further interest rate cuts.

Japan meanwhile accepted what its G7 partners said was the most critical language ever |n a G7 statement on the need for it to move faster to reform its ailing banking sector and kickstart domestic demand.

In the longer term, the Fund/Bank annual meetings sketched out the broad areas of new measures to forestall and resolve future crises, notably by making the private sector share the cost.

Camdessus said in a report to the Fund's policy-making Interim committee that in extreme cases countries in difficulty could use the "good offices" of the Fund- to seek easier debt repayment- terms from private creditors, suggesting a new willingness on the part of the IMF to ensure that the private sector bears its fair share of the re-

sponsibility.

His report also raised the possibility that — again, in "extreme situations — IMF could help countries facing acute pressures on their exchange rates and reserves to arrange a moratorium on debt repayment.

The IMF is also calling for greater transparency in the operation of public and private financial bodies, and frequent disclosure by governments of data on their foreign reserve positions, external debt and capital flow.

It is proposing international standards in auditing, accounting and bankruptcy operations, adequately capitalised banking sectors and cautious liberalisation of capital accounts to ensure that markets are not flooded with Investment they cannot properly manage.

All these measures are for now simply proposals, however. and there were signs of exasperation that more concrete decisions were not taken here.

Indian Finance Minister Yashwant Sinha complained Wednesday that "after five days of intense discussions and debate we are still at a loss as to why contagion has spread."