MercoPress. South Atlantic News Agency

G24 demand IMF surveillance of advanced economies

The International Monetary Fund should step up its surveillance of the United States and other advanced economies in light of the global credit crisis shaking world markets, the Group of 24 developing countries said Friday in Washington.

The group also repeated their demand for greater representation of developing countries in the governing bodies of the IMF and its sister organization, the World Bank, to adapt institutions created 63 years ago to the conditions of the 21st Century. G 24 Finance ministers and central bankers "noted the vulnerability of the U.S. subprime mortgage market and its financial and spillover effects" on the global economy. They added the crisis "underscored the need to improve the IMF surveillance of the advanced economies putting as much focus in evaluating their vulnerabilities as it does in emerging market economies." The ministers said governments and international financial institutions should work together more closely "to prevent the emergence of a larger crisis" in the global economy. It said the IMF should be ready to call nations together for discussions as it did for the first time in the past year to talk over global trade imbalances. The G-24 also expressed misgivings about "the rising sentiment of protectionism in trade and investment in advanced countries and cautioned against measures that impede countries' integration into the global financial system." G24 ministers stressed the "utmost importance" of increasing the representation of developing countries in the governance of the World Bank and the IMF "to redress the legitimacy and democratic deficits" that have "eroded their effectiveness and public support". They also pointed out that the reforms process and proposals so far "are disappointing and unacceptable as they fall short of the reform's fundamental goals." Oscar Tangelson, Argentina's Deputy Economy Minister, who chaired the G-24 meeting, said, "Letting the IMF continue taking its decisions on a one-dollar, one-vote basis goes against its credibility. An institution and its policy advice would not longer be credible if the institution is managed by the richest only." At present, major industrialized nations such as the United States, Japan, Britain, Germany and France have single seats on the IMF 24-member governing board, while a country like Brazil, with South America's largest economy, shares a seat with eight other countries. The United States is the largest shareholder in the IMF and World Bank. The G-24 was established in 1971 to coordinate developing countries' positions on international financial and developmental issues and includes nations from Asia, Africa and Latin America. China sits in on the meetings as an observer.