Reform of IMF, one step closer
THE world's financial leaders are set to endorse an Australian initiative to redesign the International Monetary Fund, the watchdog of the global economy, to reflect the new power of Asia and other rising economies.
The proposal, which Treasurer Peter Costello personally has promoted strongly to his counterparts overseas, would start a two-stage process for major renovations to the fund, set up in 1945 as a source of advice and lender of last resort to keep the world from economic collapse.
The issue will come to a crunch next week in Singapore, when finance ministers from all over the world are expected to adopt the Australian plan, approving an immediate increase in voting rights for China, South Korea, Mexico and Turkey as a downpayment on the first significant overhaul of the IMF since it was founded.
The ministers will be in Singapore for the annual meetings of the IMF and its sister, the World Bank, where the reform plan will take centre stage, along with the slow-moving discussions on reforming global financial imbalances.
Debate on the issue will then move to Melbourne, where in November, under the chairmanship of Mr Costello, the finance ministers and central bankers of the world's biggest economies will begin what is likely to be a long and bitterly divisive process to redesign the fund to better reflect the 21st century world.
Mr Costello has nominated IMF reform, along with security in energy and the implications of ageing for global finances, as one of the three core topics to be debated by the G20 finance ministers and bank governors in Melbourne. Among those expected to attend are new US Federal Reserve chairman Ben Bernanke and Treasury Secretary Henry Paulson, Britain's Chancellor of the Exchequer, Gordon Brown, and European Central Bank president Jean-Claude Trichet.
The plan was approved in Washington on Friday by the fund's executive board, although there has been some opposition from African countries concerned that a bigger voting share for China and other fast-growing economies will be partly at their expense.
Technorati Tags: IMF, Reform and Singapore.
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