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Giving developing countries bigger voice
2005-10-18
China Daily
Reform of the Bretton Woods Institutions are high on the agenda for the annual meeting of the Group 20's (G-20) finance ministers and central bank governors being held this weekend in Xianghe, Hebei Province.
Sixty years after their creation, the International Monetary Fund (IMF) and the World Bank are facing increasing calls for reforms to give developing nations a bigger voice to cope with new challenges posed by globalization.
Comprising key industrialized and developing countries, G-20 is an ideal place to hold such meaningful discussions.
The twin organizations have been playing a pivotal role in maintaining global financial stability and providing development aids.
Over the decades, the two organizations have also been making adjustments to stay relevant to an ever-changing world.
Scathing words about the performance of the Fund and the Bank and the competence of their staff have not always been fair.
But the sister institutions never really addressed a critical issue: the concerns of many of its major clients - the developing nations - about the two institutions' real purpose. Citing chock full of evidence, critics have said they were there to serve their rich shareholders' interests.
Some observed that the Fund and the Bank have put most of their resources to those that have relatively closer interest links with the G-7 members. African nations, especially those sub-Saharan ones, have almost been ignored.
While the Fund and the Bank can intervene in domestic affairs in developing countries through conditions that come with loans and projects, the two have basically done little to address industrialized nations' problems, which often have enormous bearing on the health of the global economy.
Other factors that caused the scepticism include unsatisfactory outcomes of IMF prescriptions for economies they tried to save, and the hasty opening of the market suggested by the two organizations that were believed to serve multinational corporations more than the developed countries themselves.
The root of the problem is developing nations' under-representation in the organizations and the lack of transparency in the decision-making process for some of the key issues.
Members from the rich countries dominated discussions, policy-formulation and leading posts in the two organizations because their big shares give them overwhelming voting power.
Under such circumstances, it indeed could be difficult for the two institutions to work out good, concrete solutions for their developing members all the time.
In fact, developing nations could cast doubts on the sincerity of the institutions, however sensible and well-meaning the measures they take in response to criticism seem.
Even after years of work, malnutrition, epidemic and inequity, as a result of poverty, are still plaguing billions of people. Some of the problems are deteriorating.
To address the problem more effectively, those in dire need and those who have accomplished much in their fight against poverty should be given a bigger voice in the largest development institutions in the world.
If the rich countries maintain the belief that they should always have the final say in the Fund and in the Bank, their sincerity for dealing with the challenges will continue to be doubted. The IMF and the World Bank thus will continue to be organizations without full credibility.
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