Top officials of the International Monetary Fund say the organization must reform to be able to respond more quickly to crises in the changing global economy. IMF officials concluded two days of meetings in Washington with a statement calling for structural reforms of the organization.
British Chancellor of the Exchequer Gordon Brown says the global economy has undergone rapid changes in recent years, and so too, must the 61-year-old IMF. "We resolve to make the IMF more fit for purpose in a global economy and more able to address challenges that are quite different from 1945 when the IMF was created," he said.
In recent years the global economy has posted strong gains, and IMF officials say they expect that growth to continue for at least the next couple of years. But with the growth has come some risks, including massive trade imbalances and high oil prices. Brown, who chair's the IMF's steering committee, said meeting those new challenges will require the IMF to take a broader approach. "The IMF should monitor in future more deeply - not just country policies but the linkages and spillover effects of one country's policies on others in the global economy," he said.
The broader approach could include expanding IMF monitoring of countries' economic policies or strengthening oversight of exchange-rate practices.
Officials say the reforms could be particularly useful in resolving regional trade imbalances.
Other proposed reforms include giving some countries a greater voice in IMF decision making. IMF Chief Rodrigo de Rato says he supports such a change because it could give the Fund more legitimacy. "I have spoken several times about the need for increased voting power for some countries, including a number of emerging market economies to ensure that they have a role in the Fund's decision-making process that accords with their increasing importance in the world economy," he said.
IMF critics have charged that poor countries have been underrepresented on the organization. Others say the Fund has become weak and ineffective as the world's lender of last resort.
Critics will have the opportunity to see whether the recommended reforms go far enough when IMF officials gather at the organization's annual meeting in Singapore in September.