By Ming Jinwei
Finance ministers of Brazil, Russia, India and China on Saturday called for greater voting rights for developing countries within international financial organizations on the sidelines of a meeting of G20 finance ministers and central bankers.
The so-called BRIC nations made it clear in Horsham, England that reforming international financial organizations should be put on the must-do list when G20 leaders meet in London on April 2.
The International Monetary Fund (IMF) and the World Bank, two major international financial organizations, were founded at the Bretton Woods Conference held in 1944, when the Second World War was drawing to an end and the world was in dire need of a new financial and monetary system.
As a reflection of the world economic order back at that time, the United States and European countries have held a dominant role within the IMF and the World Bank.
Over the last 65 years, the world has gone through fundamental changes. But the decision-making within the two world financial organizations still largely rested with developed countries as it did more than half a century ago.
For instance, the voting right of developing countries within the IMF stands at 42.1 percent of the total, which is absolutely not in proportion to the majority number of developing countries in the world nor to their collective GDP strength.
After a series of incremental changes, progress has been made, but it is far from being enough.
British Finance Minister Alistair Darling told reporters after the meeting that the business-as-usual approach would not be an option as the world has changed drastically over the last six decades.
The global financial crisis which drew most developed countries into recession proves that the global financial system drawn up by rich nations in the 1940s failed to prevent the meltdown.
"We'll have to change the tires of the car with the car moving," said Brazilian Finance Minister Guido Mantega at a G20 meeting last November.
The BRIC countries were asking for a review of the roles of the IMF and the World Bank to make sure they stay relevant in a new financial and monetary system.
Proposals discussed in the past months include setting up a global early warning system for the financial sector that can detect risks accumulated in major financial centers, improving the internal governance of international financial organizations, building effective responding and rescuing mechanisms, and enhancing the capabilities of international financial institutions.
The critical part of any reform package should be greater representation and voting rights for emerging and developing countries within the IMF and the World Bank.
The reform is not only about reflecting the rising strength and importance of those countries, but also about giving greater legitimacy to the IMF and the World Bank.
Another reform should be about how the leaders of the IMF and the World Bank are chosen.
There has long been an infamous unwritten rule, according to which the World Bank should be led by an American and the IMF by a European.
It should be common sense that leaders of any international financial organizations have to be decided on the merits of the candidates, instead of their nationalities.
The ongoing financial crisis has highlighted the deficiencies of the current international financial and monetary system.
The call for establishing a new international financial order that is fair, just, inclusive and orderly has become more urgent than ever.
Developing countries should have more clout on the global stage. The world's road to economic recovery must run through the developing countries.
(Xinhua News Agency March 16, 2009)