There have been questions about their legitimacy as bulwarks of the global economy
The IMF and the World Bank held annual meetings this week in Washington under a cloud of financial constraints and questions about their legitimacy as bulwarks of the global economy.
The 188-nation sibling institutions will turn 70 next year in a global economy less and less dominated by the United States and Europe, as Brazil, China, India and other emerging-market economies muscle their way onto center stage.
With all eyes fixed this week on the US budget crisis, the grand reception of the world's finance leaders in the US capital spared the International Monetary Fund another uncomfortable debate on the damaging effects of the austerity it imposes, particularly in the eurozone.
But the IMF's imbalanced representation once again was glaringly clear: the emerging economies have complained for years that their relatively small voting rights in the institution insufficiently reflect their real power in the world economy.
China, the world's second-largest economy, has only slightly more weight than Italy at the IMF, which has been headed by a European since its creation in 1944.
A governance reform has been in the works for three years but its implementation has been blocked by the effective veto of the US.
IMF Managing Director Christine Lagarde could only display her impotence in deploring once again that a "major member" had not yet approved the 2010 reform.
But on Friday, she hammered home the point -- saying "we must be even more representative and mirror these shifts" -- while still having no way to twist the arm of the IMF's largest stakeholder.
"That is clearly a longstanding problem," said Jacob Kirkegaard of the Peterson Institute for International Economics in Washington.
The IMF "is out of date," he said. "It's basically a credibility problem and it's going to get worse over time."
The big emerging BRICS economies -- Brazil, Russia, India, China and South Africa -- brimming with impatience, have launched their counter-offensive: the creation of their own monetary fund.
The BRICS fund is expected to be finalized in 2014, Brazilian central bank chief Alexandre Tombini said Friday.
The 188-nation sibling institutions will turn 70 next year in a global economy less and less dominated by the United States and Europe, as Brazil, China, India and other emerging-market economies muscle their way onto center stage.
With all eyes fixed this week on the US budget crisis, the grand reception of the world's finance leaders in the US capital spared the International Monetary Fund another uncomfortable debate on the damaging effects of the austerity it imposes, particularly in the eurozone.
But the IMF's imbalanced representation once again was glaringly clear: the emerging economies have complained for years that their relatively small voting rights in the institution insufficiently reflect their real power in the world economy.
China, the world's second-largest economy, has only slightly more weight than Italy at the IMF, which has been headed by a European since its creation in 1944.
A governance reform has been in the works for three years but its implementation has been blocked by the effective veto of the US.
IMF Managing Director Christine Lagarde could only display her impotence in deploring once again that a "major member" had not yet approved the 2010 reform.
But on Friday, she hammered home the point -- saying "we must be even more representative and mirror these shifts" -- while still having no way to twist the arm of the IMF's largest stakeholder.
"That is clearly a longstanding problem," said Jacob Kirkegaard of the Peterson Institute for International Economics in Washington.
The IMF "is out of date," he said. "It's basically a credibility problem and it's going to get worse over time."
The big emerging BRICS economies -- Brazil, Russia, India, China and South Africa -- brimming with impatience, have launched their counter-offensive: the creation of their own monetary fund.
The BRICS fund is expected to be finalized in 2014, Brazilian central bank chief Alexandre Tombini said Friday.
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