IMF, World Bank map road to recovery2 min read . Updated: 06 Oct 2009, 03:04 PM IST
IMF, World Bank map road to recovery
IMF, World Bank map road to recovery
Istanbul: Finance chiefs from around the world focused on mapping out recovery from the global economic crisis at the annual meetings of the IMF and World Bank here on Tuesday, with a plea to include the poor.
With emerging markets playing a leading role in the return to growth, finance ministers and central bank governors from 186 nations hammered out a strategy for sustainable growth and reform of the global financial system at the heart of the crisis.
International Monetary Fund chief Dominique Strauss-Kahn called for global economic cooperation that would build on efforts by the Group of 20 (G20) over the past year and which have averted the collapse of the world economy.
“We seem to have pulled back from the brink, and even if as we all know it is much too early to declare victory, we have at least stepped onto the road of recovery," the IMF managing director said.
Strauss Kahn said that cooperation must extend beyond the G20 biggest rich and emerging countries to the forum of the IMF, urging the 186 countries to “seize this opportunity to shape the post-crisis world."
The membership includes “low-income countries, home to billions who still live in poverty, who remain economically marginalised. Their voices too must be heard," he said.
The finance chiefs were also to tackle reform of the voting power in the two institutions to better reflect the growing weight of the emerging market and developing countries in the global economy.
The delegates are to consider a shift of power of at least 5% from over-represented countries to under-represented countries in the IMF, and a similar transfer of at least 3% at the World Bank.
“This will enhance our legitimacy," Strauss-Kahn said.
World Bank president Robert Zoellick urged members to go beyond the reform already supported to give developing countries at least 47% of the voting shares of the institution, and raise it to 50%.
“The international system needs a World Bank Group that represents the international economic realities of the 21st century, recognizes the role and responsibility of growing stakeholders, and provides a larger voice for Africa."
The IMF has given out tens of billions of dollars (euros) of credit in recent months to prop up faltering economies around the world and the World Bank has stepped up its lending for 2009 to record levels.
Many are now looking to the Washington-based sibling institutions to help bolster a tentative recovery and mitigate the painful social effects of the crisis, including rising unemployment and poverty.
Some 13,000 people attended the two-day meetings of finance ministers, central bankers and academics from the member states.
A major protest against the institutions was also expected to be held on Tuesday and extra police and security guards have been deployed around Istanbul, Turkey’s biggest city and commercial capital.
Conferences leading up to the meetings began last Thursday with a Turkish journalist throwing a shoe at Strauss-Kahn in protest against IMF policies.
Reflecting economic fears, finance chiefs have sounded a cautious note.
“There are many risks out there. These include growing unemployment lines, rising protectionism and still-large output gaps," Zoellick said on the eve of the talks.
“The global economy could still suffer a setback, not least in 2010 when governments plan to withdraw much of their economic stimulus and debt rollovers could be combined with a rise in interest rates," he said.
Strauss-Kahn said: “There is no way to say the crisis is over when we still have this big rise in unemployment in front of us."