The chairman of the International Monetary and Finance
Committee (IMFC) yesterday said it should have executive power
to spearhead a strengthened IMF.
The Fund should the main engine for coordination of
[economic] policies across the world, IMFC chairman
Youssef Boutros-Ghali said.
This would mean that the IMF becoming chief among the
family of Gs or groups of countries that coordinate
economic policies, an IMF official told Emerging
After the IMFC met in Istanbul yesterday,
Boutros-Ghali told Emerging Markets that the committee
a group of 24 finance ministers from leading advanced
and emerging economies who oversee the executive board
could move from an advisory role to an executive
The issue is going to become one of broad
restructuring, he said. The IMFC is an advisory
body and we give the executive board advice. It has been put
forward that the IMFC should be a decision-making board. The
questions of when and how are still on the table.
Today the Group of 30 senior financiers and academics will
issue a report on IMF reform that may advocate setting up an
executive body comprised of politicians, instead of full-time
officials as at present. Stanley Fischer, governor of Bank of
Israel and co-author of the report, has this weekend told
Emerging Markets that such a body could be modelled on
Boutros-Ghali told a press briefing that the IMFs
mandate, which was finalised more than 60 years ago, needs to
be revisited. To this end, the IMFC called on the
Fund to review its mandate, to cover the full range of
macroeconomic and financial sector policies that bear upon
global stability and to report back to the IMF by the time of
the next annual meeting.
The IMF needs to evolve and to codify the new
and expanded role it has taken on since financial crisis and
global recession erupted, Boutros-Ghali.
This process will include governance issues such as
rebalancing of the voting shares and the voice of various
countries to reflect more existing realities of the world
This will not happen overnight, Boutros-Ghali
said. We are reforming an organisation that is complex,
sophisticated and reaching every corner of the world
At the end of a week when world markets dipped,
Boutros-Ghali set out the most optimistic view of the world
economy heard in Istanbul this weekend. He said the IMFC had
had its first non anxiety-ridden meeting in 18
Signs in the world economy allow us to be
optimistic, the Egyptian finance minister said at a press
briefing. We dont want to get carried away but
things are looking up, Growth rates are returning to positive
Systemic risks are coming down and the financial
sector is probably recovering. We now need to make sure that
this recovery continues to go forward and establish itself. We
are not out of the woods yet but we are well on our
IMF managing director Dominique Strauss-Kahn suggested that
global financial and economic crisis should be behind us
within ten to 12 months and that now is a unique
opportunity to reshape the world after the crisis.
Picking up this theme, the IMFC called on the IMF to support
proposals from the G20 Pittsburgh summit for mutual economic
assessments by the 20 leading advanced and emerging economies
that it represents.
The IMF should develop forward-looking analysis of
whether policies are collectively consistent with more
sustainable and balanced trajectories for the global
economy, the IMFC said in its communique.