G20 pushing for IMF, WB reform

MELBOURNE – The world’s most powerful economic leaders vowed yesterday to maintain pressure on the International Monetary Fund (IMF) and World Bank to better reflect the global community.

The Group of Twenty (G20) finance ministers and central bankers said the effectiveness and legitimacy of the two institutions must be enhanced through comprehensive reform. “A strong, credible IMF that reflects today’s global economic realities is in our shared interest,” the G20 said in a communique after a two-day meeting in Melbourne.The communique welcomed moves by both the IMF and World Bank to review their composition.The meeting’s chairman Australian Treasurer Peter Costello said the organisations’ current make-up reflected the post-World War II environment they were established in.”The IMF and the World Bank will only be valuable as institutions if they represent the world as it’s become, not the world as it was,” Costello told reporters.”That means (giving) key emerging markets a greater voice and developing countries, particularly in Africa.”South African Finance Minister Trevor Manuel backed the call saying the IMF was at risk of dying under its present mandate.”The issue of reform of these institutions is paramount,” he said, referring also to the World Bank.”We accept we need an institution like the IMF but its mandate needs revisitation,” said Manuel, who will host next year’s G20 summit.In September, the IMF increased voting power to four under-represented countries – China, South Korea, Turkey and Mexico – and agreed to determine second stage reforms no later than its 2008 annual meetings.On Saturday, IMF managing director Rodrigo Rato said as well as widening representation for developing countries, the organisation was improving its surveillance of markets and economies.The IMF was blasted for its response to the Asian financial crisis, which broke out in 1997, and Rato said its crisis management was again under review.”We are reviewing whether our existing crisis prevention instruments provide an adequate response for an emerging market member that might run into a financial crisis down the road,” he told a briefing.Nampa-AFP”A strong, credible IMF that reflects today’s global economic realities is in our shared interest,” the G20 said in a communique after a two-day meeting in Melbourne.The communique welcomed moves by both the IMF and World Bank to review their composition.The meeting’s chairman Australian Treasurer Peter Costello said the organisations’ current make-up reflected the post-World War II environment they were established in.”The IMF and the World Bank will only be valuable as institutions if they represent the world as it’s become, not the world as it was,” Costello told reporters.”That means (giving) key emerging markets a greater voice and developing countries, particularly in Africa.”South African Finance Minister Trevor Manuel backed the call saying the IMF was at risk of dying under its present mandate.”The issue of reform of these institutions is paramount,” he said, referring also to the World Bank.”We accept we need an institution like the IMF but its mandate needs revisitation,” said Manuel, who will host next year’s G20 summit.In September, the IMF increased voting power to four under-represented countries – China, South Korea, Turkey and Mexico – and agreed to determine second stage reforms no later than its 2008 annual meetings.On Saturday, IMF managing director Rodrigo Rato said as well as widening representation for developing countries, the organisation was improving its surveillance of markets and economies.The IMF was blasted for its response to the Asian financial crisis, which broke out in 1997, and Rato said its crisis management was again under review.”We are reviewing whether our existing crisis prevention instruments provide an adequate response for an emerging market member that might run into a financial crisis down the road,” he told a briefing.Nampa-AFP