The World Bank announced its passage on Sunday of what it calls a "historic" package of reforms at the end of key meetings of global finance leaders. The package includes a massive increase in capital for the institution, its first in 20 years, and an increase in voting rights of China and other developing and emerging nations. Greece's debt crisis was also discussed at the World Bank and at the International Monetary Fund, or IMF.
World Bank President Robert Zoellick said the package that was approved during the past few days dynamically changes the group. He said it was a first time in the history of the now-186 nation lending institution that voting power was adjusted, while asking for a capital increase.
"It was an ambitious combination - some said too ambitious. But we worked hard with our member states to demonstrate our value added to forge a deal that meets mutual interests," he said. "This is modern multilateralism at work."
The World Bank agreed to raise its lending resources by more than $86 billion at a time when the world is still recovering from an economic downturn. Zoellick said that more than half of the increase will come from developing countries.
"The additional capital means that we will no longer face the possibility that we would have to cut back our lending later this year," said Zoellick. "We came into this crisis well capitalized. We have provided a record $105 billion in financial support since the crisis began to bite in 2008."
Speaking after a meeting of the bank's policy-setting Development Committee, Zoellick said the World Bank also took a significant step by increasing the voting rights of developing countries to more than 47 percent.
"The endorsement of the shift in voting power is crucial for the Bank's legitimacy. It recognizes that we need to consign outdated concepts like 'Third World' to the history books," he said. "Today, the world is moving towards a fast new evolving, multipolar world economy."
The move puts China's influence at the bank above several Western powers, making it third - behind the United States and Japan.
The dominance of the United States and the major European nations in the bank's decisions has long been a source of criticism from countries such as Brazil, Russia, India and China.
Political scientist Martin Edwards at Seton Hall University in New Jersey says the shift in voting rights reflects the changing distribution of economic power in the world.
"Obviously, China's rise has been something that people are talking about," he said. "China gave $50 billion to the IMF this year. It is tough to think about China as a developing country. They are increasingly becoming a part of global governance."
But Edwards says it is unclear what China might seek to achieve with its influence.
"Their priorities for World Bank operations are going to be reflective more of how their society is made up. So that is to say that the Chinese would favor loans and loan programs to countries that were a little more statist," he said.
The World Bank's effort to boost the influence of developing countries in its operations was a key goal set forth by leaders of the Group of 20 nations last September. Analysts say the World Bank move could set a precedent for changes at the International Monetary Fund. The IMF was unable to reach an agreement on voting rights changes during its meetings on Saturday.
Meanwhile, the Greek debt crisis remained a key topic on the sidelines of talks at the World Bank and the International Monetary Fund here in Washington.
Speaking at a news conference at IMF headquarters on Sunday, Greek Finance Minister George Papaconstantinou expressed confidence that Athens will receive international financial aid in time to avoid defaulting on its debt next month.
"I think early May is a good ball-park figure. I do not want to give a particular date," he said. "We all know that these negotiations take weeks. We are working very fast."
Papaconstantinou said the loan package framework has strong conditions to help reassure European and IMF lenders, as well as fiscal measures to reassure Greek citizens that efforts are being made to end the country's financial crisis.
The Greek finance minister downplayed concerns that some European Union members were not fully supportive of the loan package and quickly responded to a question about what Greece might do if the loan is not approved.
"There is no if. The support mechanism will be ready during the month of May. And there is absolutely no one in Europe or outside it that has a different opinion to this," said Papaconstantinou.
Greece has accumulated more than $400 billion in public debt. The country is seeking emergency loans of about $40 billion from European countries and more than $13 billion from the IMF.
IMF Managing Director Dominique Strauss-Kahn says everyone trying to help Greece understands the "need for speed."
Officials in Europe and at the International Monetary Fund have made it clear to Greece that their support is contingent on Athens' efforts to put its fiscal house in order.
Greece has agreed to begin an austerity program that cuts salaries and freezes pensions for civil servants, and raises taxes. That program has triggered massive street protests and labor strikes in Greece.