Reform of international institutions essential to meet global challenges

In order to ensure the relevance of today's financial institutions - the International Monetary Fund (IMF) and the World Bank - a critical revision of their mandates must be initiated, President Bharrat Jagdeo of Guyana has said.

Writing in the latest Commonwealth Finance Ministers Reference Report he argues that "their effectiveness in fulfilling revised mandates can only be assured if the instruments they currently have at their disposal are also modified appropriately.

"If the Fund and the Bank are to retain their legitimacy and be seen as representative of the world they aspire to serve, much more needs to be done than the current set of governance changes under consideration."

Mr Jagdeo suggests that the IMF should focus now on forestalling crisis through concerted action. As a result, this might mean advocating more conservative economic and financial policies to avert systemic problems. "It is important that the Fund serves as an early warning system, assuming the role of evaluating and monitoring the global financial system, as well as the economies of individual member countries, with a view to avoiding global financial catastrophes, as well as national crises."

Commonwealth Heads of Government have advocated fundamental reform of international institutions, including the Bretton Woods Institutions for the past year.

"It is critical that the momentum be maintained in the process that has been launched," writes Mr Jagdeo.

The Commonwealth Finance Ministers Reference Report is an annual publication providing Commonwealth finance ministers with a central source of information regarding macroeconomic issues, financial questions and trade relations that affect Commonwealth nations.

The 2008 Report was produced for the Commonwealth Finance Ministers Meeting (CFMM) held in Castries, St Lucia, 6-8 October 2008.

This volume includes case studies of successful projects with transferable solutions, articles on the key issues discussed at CFMM and in-depth analyses from economic experts.

"The fuel, food and financial crises of the last year have shown - again - that multilateralism is more needed than ever before to tackle the challenges of today's world," states Commonwealth Secretary-General Kamalesh Sharma in the 2008 Report.

"Yet, the framework of international institutions established for this task at the end of the Second World War has lagged behind. Commonwealth leaders were ahead of the game in recognising and responding to this.

"Fundamental reform is necessary across a range of institutions to make them effective in their operation, focused on the right issues, and responsive to the entire membership."

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