By Babajide Komolafe
The global economic crises has reinforced the need for international collaboration in resolving economic problem, say International Monetary Fund.
â€œIf this crisis taught us anything, it is that the world needs multilateralism even more today than it did when the Bretton Woods institutions were founded in 1944â€, said Dominique Strauss-Kahn, Managing Director, IMF
â€œWe saw this during the crisisâ€”when countries came together to act. In fact, I believe that when historians look back, it is this level of unprecedented international collaboration that will stand outâ€, he said in an address delivered at theÂ Bretton Woods Committee Annual Meeting inÂ Washington last week.
Making a case for the continued existence of the Fund, he said, â€œThe debate over the Fundâ€™s mandate is not about â€œexpandingâ€ it in new directions. Rather, what we seek is a new focus and capacity to deal with systemic risks. A renewed and re-energized mandate can set the foundationsâ€”and the expectationsâ€”for the Fund to adapt to the changing needs of its members in the post-crisis era. And as we look forward, we will need more of this kind of collaboration, not less. More multilateralism, not less. More IMF, not less.
Make no mistake: the original mandate of the IMF has been validated. Now we need to clarify and strengthen it even more: To meet the global challenges ahead; To serve our membership even more effectively; To build a Fund for the 21st century.â€ But, â€œA renewed mandate for the IMF will have little legitimacy unless we tackle long-standing grievances with our governance. Our crisis prevention efforts could be hampered by concerns about even-handedness. Our crisis response efforts could lack credibility.
And our commitment to address longer-term issues affecting international monetary stability may be questioned.â€œThe good news is that the G-20 has already provided firm political backing to our governance reform effortsâ€”agreeing an important quota shift at the Annual Meetings in Istanbul.
The bad news is that translating reform commitments into reality is not always easy. For example, the 2008 quota and voice reform is still not effective. While it received overwhelming approval from nearly all of our Governors back in April 2008, so far as only 64 of our member countries representing about 70 percent of the required 85 percent voting powerâ€”have passed the necessary legislation to make the reform effective.
â€œTo achieve lasting governance reform, the Fund needs the active support of its entire membership. We also need to go beyond the issue of quota and voice to include other important elements such as the diversity of staff and management of the Fundâ€”an area where I have sought to make progress but where I fully recognize, we can and must do more.â€