Washington  - The International Monetary Fund (IMF) on Saturday said leaders of the world's top 20 economies took a significant step toward resolving the global financial crisis but cautioned that critical reforms in governance were needed for there to be any lasting impact.

Leaders of the Group of 20 nations - a mix of wealthy and developing countries - met for the first time ever at an emergency summit in Washington in a nod to the increasing clout of emerging economies like China, India and Brazil.

"Today's summit was significant because of the people present. A new world economic order is developing that is more dynamic and more inclusive than any we have yet seen," said Dominique Strauss-Kahn, the IMF's managing director.

Strauss-Kahn also noted the leaders' commitment to adopt broad government spending plans to boost demand in their economies. The IMF has forecast a global recession for 2009, but government actions could still pull them out of the downturn.

"I welcome the emphasis on fiscal stimulus, which I believe is now essential to restore global growth," Strauss-Kahn said. "Each country's fiscal stimulus can be twice as effective in raising domestic output growth if its major trading partners also have a stimulus package."

Strauss-Kahn said the summit meeting marked a sharp departure from the rhetoric of past economic downturns, like the Asian crisis in the late 1990s. This time leaders promised concrete actions to prevent a similar financial crisis from sneaking up on global economies.

"I must confess that I've heard these kind of speeches for years without any kind of changes, especially after the Asian crisis. And nothing happened," he said.

This time, nations were beginning to work toward systemic changes while in the midst of the crisis and Strauss-Kahn said he was hopeful "by the next meeting in March-April ... we change governance in the world. That didn't happen in the last 60 years."

In the past few months there has been much talk on the relevance of the Bretton Woods institutions - the IMF and World Bank - and the need for an expanded role for both.

Strauss-Kahn said the IMF would play a greater role in surveillance, being a unique institution because of the way it conducts its early warnings, which is critical to avoiding future crises.

Surveillance was strongly underlined in the G20 declaration and the IMF has been asked to take a lead in drawing lessons from the crisis, he said.

Regulation and surveillance were key aspects of the G20 declaration, but "building regulation is not job of the IMF. We can provide advice, new ideas," he clarified.

However, Strauss-Kahn warned about an over reliance on rules: "One big problem with pro-cyclical rules ... they work well in quiet times ... but when you're in a crisis, they cause problems."

He also cautioned that while the IMF's resources were adequate to deal with the globalized crisis as it stood today, they "might be insufficient in the next couple of months."

The IMF has already pledged to lend 100 million dollars - about half its total reserves - to developing countries facing critical cash shortfalls, as banks and international lenders have pulled foreign investment in the face of the ongoing credit crisis.

Strauss-Kahn welcomed Japan's pledge to add 100 billion dollars to the IMF's reserves.

"The door has been opened by Japan," he said, adding that some of the IMF's 185 members have pledged smaller amounts.

The IMF has already announced aid packages for Hungary, Ukraine and Pakistan, with one for Iceland expected to be disclosed next Wednesday, and a few more countries in discussion.

Strauss-Kahn hoped "the (additional) number of countries (asking for loans) will not be too high as it reflects problems of our membership."

Discussing the relevance of the "G's" - particularly the G7 and G8 - Strauss-Kahn said there needed to be more debate on whether the G20 is the right size for a global economic bloc of the future. (dpa)