Calling for enhanced multilateral cooperation, IMF-World Bank annual meetings conclude in Istanbul

After seven days of meetings and seminars, the International Monetary Fund and World Bank annual meetings ended early yesterday at the Istanbul Congress Center. In his speech Tuesday, IMF Managing Director Dominique Strauss-Kahn told policymakers from 186 countries that global cooperation had saved the world from a far worse crisis and that now leaders should seize the opportunity to shape a post-crisis world. "Even if it is much too early to declare victory, we have at least stepped onto the road to recovery," he said. The meetings were the second time World Bank annual meetings had taken place in Istanbul, the last time being in 1955. Coming out of the Oct. 4 meeting of the International Monetary and Financial (IMFC), the policy-steering committee asked the IMF to address four key reform areas: the IMF’s mandate, its financing role, multilateral surveillance and governance. These "Istanbul Decisions," Strauss-Kahn said, will be a focal point of IMF activities for the coming year. The committee agreed to maintain stimulative policies until global economic recovery is assured, backing moves to make reforms in IMF governance to give greater voice to dynamic emerging markets and developing countries. The four decisions include a review of the IMF mandate, so the body encompasses the whole range of macroeconomic and financial sector policies that affect global stability, an assessment of how to build on the success of the Flexible Credit Line, as well as the provision of insurance to more countries as the lender of last resort. They also include an assessment of whether the IMF's enhanced financing instruments, such as the Flexible Credit Line, could help address the question of global imbalances by reducing the need for countries to self-insure against future crises by building up large reserves. The IMFC also endorsed the wide-ranging reforms on the governance front agreed to by the G-20. This will shift quota shares toward dynamic emerging markets and developing countries by at least 5 percent by January 2011. Strauss-Kahn said the IMF is ready to promote and foster deeper global economic cooperation in the future. "The G-20 is more representative than the G-7, but there are still many countries left out, especially in Africa," he said. "There are 186 countries in our membership. These countries include low-income countries, home to billions who still live in poverty, who remain economically marginalized. Their voices too must be heard. We need cooperation among all the countries of the world." He also urged the finance ministers and central bank governors to step forward with the necessary commitments to enhance the IMF's legitimacy among its membership. "This crisis had very little to do with current accounts and currency movements, the traditional focus of the IMF's attention. In an era of high-volume and fast-moving capital flows that can extend to every corner of the world, we need a broader mandate," Strauss-Kahn said. Among the agreed measures under the Istanbul Decisions to restructure the IMF and World Bank along with the current global financial system are strengthening multilateral cooperation among IMF-World Bank member countries, supporting and elevating economic growth and living standards in developing countries, giving a stronger say to developing member countries by raising their quotas in the IMF and WB, and taking measures to avoid future crises. The meetings got extensive international media coverage, and Turkey was praised for its successful organization of the event.