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LONDON—The push to reinvent the International Monetary Fund took a significant step forward this week, with nations agreeing to a rough timetable to come up with plans to reform its governance and expand its role in the global economy. The agreements, reached during the IMF’s semiannual meeting in Istanbul that ended yesterday, come as the mission of the 65-year-old Washington-based institution is being reexamined in the wake of the global financial crisis. The Fund’s 186 member nations agreed to draft a new and broader mandate for the Fund before its meeting in Washington next spring. The nations also preliminarily agreed to reshape the Fund’s voting structure, promising a blueprint for giving more clout to emerging giants like Brazil and China by January 2011. Yet if the past few days in Turkey were any gauge, the IMF’s road to change may also be a rocky one. Since the meetings opened on Saturday, nations have clashed over the scope of change at the Fund, with some, like Germany, warning against the creation of a kind of global central bank armed with massive assets and influence over world economic affairs. It has set the stage for a tug of war of ideas and a battle for influence within the Fund as it seeks to reinvent itself in the months and years ahead. Dominique Strauss-Kahn, the IMF’s managing director, urged countries in Istanbul on Tuesday to “seize this opportunity to shape the postcrisis world,” adding that all nations “need to adapt and change.” “In this modern globalized world, it no longer makes sense for global economic policy to be the concern of just a small group of countries,” he said. At a major summit in Pittsburgh last month, leaders from the Group of 20 major economies, including President Obama, reiterated calls for an enhanced global role for the IMF. One fundamental change would be in the ranks of nations that call the shots there. Founded in the wake of World War II, the IMF has served as a lender of last resort to countries in financial crisis—most often developing nations—through rescue packages that often came with strict demands for fiscal restraint and free-market reforms. The United States, Europe and Japan—the major contributors to the IMF—have held the most sway over those decisions, including what countries received money, how much they got and with what kind of strings attached. |