IMF Takes On Enhanced Global Role

Posted: 05 Oct 2009 05:14 AM PDT

ISTANBUL: The International Monetary Fund has taken on an enhanced role To promote lasting global economic recovery in the world, with its 186 member nations to keep stimulus Pledging 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, adding that this was “a unique opportunity to reshape the post-crisis world, to usher in a new era of global collaborative governance.”

Japanese Finance Minister Hirohisa Fujii said: “After going through the financial storm, I expect that the IMF will play important roles to Effectively Increasingly 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 over yet 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, IMFC members warned that the financial system remains “fragile”.

The IMFC also approved a plan to G20 voting rights increase 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 U.S. economy.

But Bernice Romero, director of international aid agency Oxfam, called the voting rights reform in “shameful” because it did not go far enough and said that “rich countries are still making decisions for the rest of the world.”

Finance Minister Amado Boudou Argentinean 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 central bank deputy governor Yi Gang said successful governance reforms, including a “significant” Realignment quota, were key to “the capacity of the fund to deliver” by enhancing its Legitimacy and effectiveness.

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