Johannesburg: The new heads of the International Monetary Fund (IMF) and the World Bank will face calls to revamp their organizations at talks with finance ministers and bank chiefs of the world’s biggest economies in South Africa this weekend.
Dominique Strauss-Kahn, who took over IMF this month, and the World Bank’s Robert Zoellick will have their first round-table meeting with Group of Twenty (G-20) representatives in what South African finance minister Trevor Manuel sees as a perfect platform to press for reform.
World Bank president Robert Zoellick (left) and IMF managing director Dominique Strauss-Kahn
“It will be the first time that we are able to have the new president of the World Bank and the new managing director of IMF, addressing a meeting of governors and finance ministers, so it gives us the platform that we want to discuss reform of the Bretton Woods institutions,” said Manuel, who will chair the meeting at Kleinmond, near Cape Town, from 17-18 November. “The topic will be quite central to our discussions.”
While G-20 includes traditional giants such as the US, Germany and Japan, it also features emerging powers such as India, China and Brazil which feel the lending institutions ignore the demands of the developing world.
Strauss-Kahn has acknowledged the need to overhaul IMF and has pledged to make reform the core of his stewardship. “The world has changed, it’s not how it was 50 years ago. Brazil, India and South Africa need more consideration,” he said on a recent visit to South Africa.
South Africa’s support for Strauss-Kahn’s candidacy came on condition the developing world’s representation in the 185-nation institution is significantly increased on his watch.
Zoellick, who took over as president of the World Bank in July, is also well-versed in the demands of the developing world from his previous posts as number two in the State Department and the US Trade Representative from 2001 to 2005. It was during that time that he witnessed the launch of the World Trade Organization’s Doha Round of trade negotiations, which still remain unresolved and a source of friction between G-20 members.
South Africa’s central bank governor, Tito Mboweni, said it was only natural that concerns over “the misalignment of power relations” in the the World Bank and IMF would crop up at the G-20 gathering.
“We have quite a number of significantly emerging market countries, which today contribute quite significantly to the global economy, and yet their voice and their representation in these global institutions is not reflective of that.”
The conference will be held against the backdrop of volatility, with the price for a barrel of oil hovering around the $100 (about Rs4,000) mark, and the US’ subprime lending problem spilling over into smaller financial markets.
“We would not want the subprime market problem to continue to cause any further global financial instabilities because that will ‘complicate the work’ that we would want to do at the G-20 level,” he added.