Calls for sweeping reforms as delegates begin talks

Washington, DC: Streets 18 and 19 in Washington, DC bear a true international look with representatives from 185 nations gathered to attend the annual meetings of the International Monetary Fund and the World Bank Group.

Today and tomorrow, the boards of governors of these two international bodies, which consist of central bank chiefs and finance ministers of various countries, will discuss subjects ranging from global financial market instability arising from the credit crunch to the impact of climate change on the food crisis in sub-Saharan Africa and the impact of sovereign wealth funds.

Delegations from developed, developing and poor nations are in attendance to listen, participate and lobby for their regional- and country-specific interests.

Protestors, civil society groups and activists too are present in full force to draw attention to their issues.

Amid the growing criticism of the IMF and World Bank's rich nations-centric activities, Robert Zoellick, the World Bank's new president, and Rodrigo de Rato, the fund's outgoing managing director, were seen searching for phrases to redefine the role of these two institutions.

Near consensus

Countering the criticism on lack of democracy in IMF, de Rato said the body's 185 shareholders are near consensus on the issue of increasing the voting power of developing countries.

The IMF's board agreed to voting reforms at last year's annual meeting in Singapore. China, South Korea, Mexico and Turkey have reaped the initial gains. The fund is nowpreparing further redistributions, to be completed next year.

Critics have said the changes have been slow and limited. De Rato disagrees. He reiterated the IMF's commitment to change, stressing it needs to demonstrate its "legitimacy" to remain effective and that there was growing consensus among members.

Voting in the IMF is weighted by the relative sizes of members' quotas, effectively the amount they pay to the IMF, related to their national income, although even here nations such as China, India, South Korea and Brazil have been under-represented.

Amid reassurances, activists and the disgruntled governments of some developing countries have called for more democracy and power sharing in the two organisations.

At the World Bank, Zoellick, who has just competed 100 days in office, promises inclusive strategies. As part of the initiatives for poor nations, the Bank has asked rich countries to contribute to International Development Association - the body that provides soft loans to the world's poorest countries.

The World Bank has more than doubled its funding to $3.5 billion and is seeking to raise more than $26 billion IDA funding.

Not impressed

Critics are not impressed. They say the World Bank is looking for ways to expand its role when it should be shrinking it and focusing on helping the poorest of the poor.

China sits on more than a $1 trillion in reserves and even has its own multibillion-dollar aid programme with projects in Africa, Latin America and Asia.

"The bank should not be involved in lending to countries that can get credit on their own," said Ian Vasquez, director of the Centre for Global Liberty and Prosperity at the Cato Institute, a libertarian policy group in Washington.

"Zoellick must act now to build a Bank that delivers poverty reduction rather than the usual blueprint of more privatisation and market opening," said Elizabeth Stuart, Senior Policy Advisor of Oxfam International.

The IMF's policy-setting International Monetary and Financial Committee is due to meet today, followed by the bank-fund Development Committee tomorrow.

The agencies' governors are to hold their plenary session on Monday. The Group of Seven advanced economies, Group of 24 developing countries, and other self-selecting blocs will also be meeting.