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WASHINGTON (AFP) - International Monetary Fund (news - web sites) chief Horst Koehler resigned unexpectedly and called for a re-think on how the world fights erupting financial crises.
Koehler gave a farewell news conference to announce he was resigning to accept a nomination to be German president.
He defended the way the IMF had reacted to turmoil in Argentina, where it struggled long to shore up the budget, especially in the provinces, and where it is still pressing for an international debt restructuring.
But the departing IMF managing director also called for a new approach to countries such as Brazil, saying its president, Luiz Inacio "Lula" da Silva, had no need for "lectures" from the Fund.
"I am initiating a new look to Latin America and to emerging markets in general," Koehler told reporters at his farewell news conference in the IMF headquarters in Washington.
"I do think this is needed because we need to see, or recognize again, that there is new leadership like President Lula who don't need to be told or lectured what is right for their people," he said.
"What they need is the appropriate support at the appropriate time," the IMF boss said.
Koehler called for a "re-thinking" of the IMF policy to ensure that countries following the right policies but suffering financial crises out of their control get timely support.
"That is one idea I have which I very much hope that my successor and shareholders of the IMF will take up further to make it practical," the Fund chief said.
The IMF also should find more room to finance the development of infrastructure, he said.
"Without growth we end in nowhere," Koehler said. "But to have sustained growth you need also to have sustained development based on investment in infrastructure," he added.
"This is an element which was in a way neglected and we do think we need to review that."
Koehler said he discussed both matters with the Brazilian president four days earlier.
On Argentina, Koehler said there had been a "good improvement" in the economy under President Nestor Kirchner, who took power in May 2003.
"But based on that, on this very positive economic development, I also do think it should now be more easy to find a solution for the international debt restructuring."
International creditors holding 81 billion dollars in Argentine bonds have rejected Kirchner's offer to repay just one-quarter of the debt, insisting he sweeten the deal.
Argentina was plunged into financial crisis two years ago with a massive debt default, a freeze on bank deposits and an end to a fixed exchange rate.
"Argentina is another case where we have to be able to re-think how things emerged and developed," Koehler said.
"But I can also say that I do not think that the IMF's role is the role which created the problems," he said.
"Our decisions at the end had always been meant to be helpful and at the end I do think they will work out as to be helpful to Argentina," he added.
"So I am cautiously optimistic."
Argentina signed an agreement with the IMF in September last year rescheduling 21 billion dollars in debt to international financial institutions.
Koehler said he hoped Argentina's dicussions with creditors and the international community go "as smoothly as possible."