IMF, WB committed to development, governance reform

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The International Monetary Fund (IMF) and the World Bank on Saturday reiterated their commitment to fostering development and pushing forward with governance reform to better represent the voices of developing countries.

Despite the fact that the IMF-World Bank annual meetings were flooded with hot issues such as economic uncertainty in the United States and the large capital inflows in emerging markets, the development needs of the world's poorest nations were not forgotten, IMF chief Dominique Strauss-Kahn said at a press conference after the conclusion of a joint ministerial meeting of the IMF-World Bank Development Committee (DC).

Stressing the role developed countries play in world poverty reduction, Strauss-Kahn called on rich countries "to do what they committed to do."

"When I see rich countries or so-called advanced economies cutting in aid lines, I do not believe they are doing the right thing, even if I can understand that they have to consolidate their own fiscal sustainability," he said.

Strauss-Kahn's view was shared by his counterpart in the World Bank. Robert B. Zoellick, the bank's president, called for a "strong" replenishment of the International Development Association (IDA), the Bank's fund for the world's poorest countries.

"Lack of support for IDA would devastate the effort to try to achieve the Millennium Development Goals (MDGs)," he said during the joint appearance with Strauss-Kahn.

The MDGs, endorsed by United Nations (UN) members in 2000, set out eight targets ranging from halving extreme poverty to halting the spread of HIV/AIDS by 2015.

"With a robust IDA replenishment we could immunize 200 million more children, extend health services to over 30 million people, give access to improved water sources to 80 million more people, help build 80,000 km of roads, and train and recruit over 2 million more teachers," said the bank chief.

Governance reform

Shifting quota in the IMF from advanced economies to developing countries is one of the major topics during the meetings.

"We reemphasize that quota and governance reforms are critical to institutional legitimacy and effectiveness," the International Monetary and Financial Committee (IMFC), the IMF main policy committee, said in a communique after concluding its 22nd meeting in Washington.

"We have made progress toward finding common ground on the core reform areas, and we are working actively to resolve outstanding issues," said the communique.

The IMFC called on its managing director to report to it on progress on quota and governance reforms by the end of October.

The U.S., the largest shareholder in both the IMF and the World Bank, voiced support for such quota reform.

"We look forward to reaching agreement on a governance package that will give the fastest growing emerging economies greater weight in the institution and a greater share of seats on the Executive Board," U.S. Treasury Secretary Timothy F. Geithner said in a statement at the IMFC meeting.

"Quota reform should bring us closer to the goal of achieving legitimate IMF representation based on countries' economic weight in the world," he added.

Strausss-Kahn said at a press conference after the IMFC meeting that the reform has not been finalized because there are still "diverging views" among IMF members.

But he expressed confidence that this issue will not drag on for a long time.

"A large part of the gap has been bridged" and the issue will be resolved in "a small number of weeks," he said.

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