Should the annual IMF/ World Bank meetings be restructured? - A Symposium Of Views - Panel Discussion

International Economy, The, Nov-Dec, 2001

For years, participants at the annual IMF/World Bank meetings have grumbled that the annual gathering needs restructuring. Some of the criticism stems from the fact that the meetings themselves, coming after the G7 policymakers have gathered and are heading for the airport, are almost an afterthought. Because the recent terrorist attacks in Washington and New York led to the postponement of this year's annual gathering, perhaps a window of opportunity has opened to revamp the structure of this gathering of the world's public and private financial elite.

TIE asked four experts what suggestions they would offer in this regard. Here's what they said:

WENDY DOBSON

Director, Institute for International Business, University of Toronto and former Associate Deputy Minister of Finance in Canada.

Yes. The current hiatus provides an opportunity to restructure the international processes (if not the institutions) to achieve more focus and inclusiveness in addressing the basic priorities of finance and development. The G7 will continue to pay most of the bills, set agendas, and manage global economic crises. But the G7 cannot by itself provide the kind of collective leadership that is required in the integrating world economy of 2001. The G20, by including new players with financial clout, mainly in East Asia, and others with regional-cum-global systemic significance, such as Brazil, India, and Turkey, is one step in this new direction.

Global meetings should build on regional forums. As East Asians have argued since the 1997-98 economic crisis, a regional financial grouping will help build the shared understanding on which closer cooperation and financial crisis management can be built.

Global meetings should also build on functional forums. The development challenges articulated in the UN Millennium Declaration are clear. Consider these targets for 2015: to reduce by half both the share of the world's population living on less than a dollar a day, and those without safe drinking water. All children should also be able to complete primary schooling by then.

These are concrete but challenging targets that governments by themselves will not be able to achieve. Functional development forums that include the IFIs, NGOs, and government and private sector representatives from both North and South should plan the necessary campaigns and assess progress.

With more decentralized and inclusive structures of these kinds, a global meeting of finance and development ministers would agree on initial goals, targets, and contributions. Periodic meetings--say every two years--could follow since, as elected representatives in most cases, they are accountable for the funding and effectiveness of the official institutions.

HENRY OWEN

Senior Adviser, Salomon Smith Barney and Co-Chairman, Bretton Woods Committee.

Here is how I believe that the Annual IMF/World Bank meetings should be restructured:

1. General. The agenda of the meetings should be focused on a few subjects of great importance to the member nation. In the speeches by the heads of the IBRD and IMF, by the heads of key national delegations (the number such speeches should be reduced), and by the head of the host government these few subjects should be emphasized; they should be the heard of the matter.

2. Specific. The key themes at the 2002 IBRD-IMF meeting should include:

a. What may be the most important problem facing humanity; AIDS. There should be reports on countries where the illness is most grave, for example, in Africa; there should be a particular report on Brazil, where anti-AIDS cooperation between the government and the private sector has been most promising. There should also be a report and a meeting on what the World Bank has been doing with the special fund that it had established against AIDS, and about how further monies could be raised for this fund from both governments and from the private sector in various countries.

b. How the IMF and the World Bank can serve as catalysts to greater private investment in the field of economic development. The experience of the World Bank in seeking to stimulate private investment should be discussed, and lessons drawn from this experience. The question should be considered of how replenishment of the IMF could draw on borrowing from private sources, as the World Bank has done, thus relieving the burden on governments (a burden strongly resented and resisted by the U.S. Congress). In the same sense it should be agreed that if there were further financial crises the losses would be borne by private banks and investors as well as by government and the IMF.

ROBERT D. HORMATS

Vice Chairman, Goldman Sachs (International).

The Group of Seven grouping is not sufficiently inclusive of the nations that today must work together both to fight terrorism and to strengthen the global economy. The Group of Twenty (including China, Russia, India, Brazil, and other large emerging economies) is far more representative of the global economic and political power structure. It should play a greater role in the Bank and Fund--and as a high level forum for discussing broader economic and financial policy issues. It need not replace the G7 or G8, but complement them. The world requires closer cooperation to fight recession and poverty much as it does to fight terrorism--and in many ways the two can be mutually supportive, even though memberships need not be entirely the same. The G20 should be elevated to a higher role at the next annual meeting--and well before.