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to promote lasting economic recovery in the world, with its 186
member nations pledging to keep stimulus support of growth in place.
The IMF's steering committee meeting in Turkey's commercial capital,
Istanbul, on Sunday endorsed a recovery plan agreed at the Group of
20 ( G20) summit last month amid the worst global economic crisis
since World War II. "We are off to the right start," IMF chief
Dominique Strauss-Kahn said on Sunday, adding that this was "a unique
opportunity to reshape the post-crisis world, to usher in a new era
of collaborative global governance. " Japanese Finance Minister
Hirohisa Fujii said: " After going through the financial storm, I
expect that the IMF will play increasingly important roles to
effectively develop a more solid and stable global financial system.
" The meeting in Istanbul took place after the IMF said that growth
had returned to the global economy but that the crisis was not yet
over because of rising unemployment in many countries and a very weak
banking sector. The International Monetary and Financial Committee
(IMFC) vowed to maintain stimulus spending "until a durable recovery
is secured" and act "to revive credit, recover lost jobs, and reverse
setbacks in poverty reduction." Mario Draghi, governor of the Bank of
Italy and chairman of the Financial Stability Board, a new watchdog
for the global financial system, warned IMFC members that the
financial system remains "fragile". The IMFC also approved a G20 plan
to increase voting rights by at least five percent for
under-represented countries in the IMF, a measure seen as helping the
group' s legitimacy as emerging markets take the lead in recovery.
The IMF last week forecast emerging and developing economies would
grow 5.1 percent in 2010 -- in contrast with just 1.3 percent in
advanced economies. China's economy was projected to grow by 9. 0
percent next year and India's by 6.4 percent -- far ahead of 1.5
percent expansion in the US economy. But Bernice Romero, director of
international aid agency Oxfam, called the reform in voting rights
"shameful" because it did not go far enough and said that "rich
countries are still making decisions for the rest of the world."
Argentinean Finance Minister Amado Boudou agreed, saying: "There will
be no 'new IMF' without a more representative and democratic
governance structure. "To achieve this goal, the voice and
representation of developing countries, including the poorest, must
be significantly increased." China's deputy central bank governor, Yi
Gang, said successful governance reforms, including a "significant"
quota realignment, were key to "the capacity of the fund to deliver"
by enhancing its legitimacy and effectiveness. Strauss-Kahn also
called for a "substantial increase" in resources from members to
reduce imbalances between countries that build up huge reserves and
others that accumulate giant deficits and to promote future growth.
He said this could be achieved if the IMF pooled reserves that
members could tap as a guarantee against financial shocks and gave
the example of new Flexible Credit Lines agreed with Colombia, Mexico
and Poland this year. "I think it's very important for the post-
crisis world," he said. "If you want to avoid countries, including
China, to build such big reserves, contributing to global imbalances,
we need to find another system." In an earlier speech to central bank
governors in Istanbul he said more than a trillion dollars may be
needed in order to put such a system in place.
