As emerging countries make bigger contributions to the global economy so to do they want to have more input into the governance of international institutions like the IMF.
To the consternation of the United States, Europe has not been very agreeable to the notion of sharing more power with the emerging markets. Last month the U.S. took the unprecedented step of blocking plans that would have seen the Europeans retain their dominance over the 24 member executive.
In recent meetings of the G20 deputy finance ministers and some central bank chiefs in South Korea no final announcements were made about how the IMF’s executive board may be changed … but the group is to meet again in November.
One topic of interest was the global imbalances in currencies and how that problem needs to be addressed. Right now Japan is under pressure to intervene in the currency market and do something, since the yen has recently soared to 15 year highs against the dollar.
John Lipsky, the IMF’s First Managing Director reported at the meeting that the world economy is making moderate improvements but there are still some fiscal challenges that need to be met.
An IMF spokesperson said today the board would be asked to approve $450 million in emergency assistance for this month to cope with the flooding in Pakistan.
“The floods in Pakistan are first and foremost a human tragedy still affecting millions of people. But this natural disaster will also have an important effect on the country’s economy as it has caused serious damage to infrastructure, severely impacted economic outlook and resulted in a worsening of the fiscal situation,”" IMF Managing Director Dominique Strauss-Kahn said.”
The money will be provided by the Emergency Natural Disaster Assistance (ENDA) fund. This emergency assistance will be in addition to the $7.3 billion USD provided by the current stand by arrangement that’s been in place since November 2008.
Relief aid to Pakistan has been slow in coming. After the flooding, world aid to the country was very slow getting started. It wasn’t till UN Secretary General Ban Ki-moon visted the stricken country in mid August that funding picked up. As early as last week though the UN had said that aid had “almost stalled” again.
It’s reported that thousands still remain trapped by the flood waters in the province of Sindh, while others have gone without food or water for days and are still living in their destroyed homes.