Sunday, November 19, 2006

G20 Meeting Results in Push for IMF and World Bank Reforms

Sources: Finance Ministers Hone In On IMF Reform
Turkey's Voting Quota in IMF to be Increased
IMF Managing Director Rato On Turkey
G20 to continue pushing for IMF, World Bank reform

Today concluded the annual meetings of the G-20 (Group of 20 nations, including Argentina, Australia, Brazil, Britain, Canada, China, France, Germany, India, Indonesia, Italy, Japan, South Korea, Mexico, Russia, Saudi Arabia, South Africa, Turkey, the United States, and the European Union). Finance ministers and central bankers of these countries, as well as representatives from the World Bank and the IMF, met in Melbourne, Australia over the weekend. Today, the agenda focused on IMF reforms announced at the conclusion of the IMF/World Bank meetings in September, including IMF members voting to increase quotas (voting power in the IMF) to China, Korea, Mexico, and Turkey.

Today, the G-20 leaders promised to maintain pressure on the IMF and World Bank to continue reforms in order to “better reflect the global community.” According to Australian Treasurer Peter Costello, the current compositions of both groups reflect the post-World War II environment during which they were established. He states that they “will only be valuable as institutions if they represent the world as it’s become, not the world as it was,” which includes giving “key emerging markets a greater voice and developing countries, particularly in Africa.” Collectively, the G-20 released the following statement: “A strong, credible IMF and reflects today’s global economic realities is in our shared interest.”

IMF Managing Director Rodrigo de Rato spoke during today’s meetings. After agreeing on quota increases for the four emerging countries, Rato said that the next step will be for the IMF “to agree on a new quota which is transparent and simple.” Rato also mentioned that other countries’ voting power will likely be increased later in order to stabilize the changing global economy.

1. Will G-20 support for the increased quota reforms and pressure resulting from this weekend’s annual meetings encourage the IMF and World Bank to make further, more liberal reforms?
2. After China, Korea, Mexico, and Turkey receive their increased voting power in the IMF, which “emerging” nations are likely to be next to receive higher quotas?

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