Significant reforms at the international financial institutions are demanded by the Intergovernmental Group of Twenty-Four on International Monetary Affairs and Development (G-24).
The Group, which acknowledges the significant evolution of the system over the decades, said that there must be recognition that rapid transformations are occurring at an unprecedented pace.
“We must therefore critically assess if the Bretton Woods System is adapting quickly enough to the rapidly changing and increasingly volatile global environment,” the current Chair and Secretary of Finance of the Philippines, Ralph Recto, said at the press conference held during the International Monetary Fund (IMF) and the World Bank annual meeting in Washington, DC.
“We are counting on our recently concluded meeting to set an unprecedented level of multilateral cooperation and action,” the Chair said.
He stated that the G-24 has identified key reforms that will enhance the system’s effectiveness and empower both the IMF and the World Bank Group to better serve their members.
According to the Chair, the IMF must create a new mechanism to support countries with sound fundamentals during liquidity crises.
“With the immediate submission of eradicating poverty on a livable planet, the World Bank needs more ambitious goals for its concessional and non-concessional windows, commensurate with the challenges of achieving inclusive and sustainable development by 2030,” he added.
The G-24 calls for the sovereign debt resolution framework to be reformed to deliver comprehensive, predictable, swift, and impactful debt relief, addressing the urgent needs of vulnerable economies.
In his remarks at the press conference, Recto stated that in order to provide developing countries with a greater voice and representation, the structural changes and governance of the Bretton Woods Institutions must be accelerated.
“Decades of individual and international efforts to end poverty and inequality, fight climate change, and fund growth-enhancing initiatives will come to a standstill, if not be reversed, in the absence of both improvements and actions,” he added.
Regarding the reform, G-24 Director Iyabo Masha emphasizes that the approval of these measures must pass both the World Bank and IMF boards.
She also revealed that the change was only initiated by the Bretton Woods project.
“So now they are in the process of consultations, going around countries, going around regions, so I will say that at a minimum, maybe by next Spring Meeting, they will have an update on where they are in the process and maybe some final decision by the Annual Meetings,” she said.
The G-24 coordinates the position of developing countries on monetary and development issues in the deliberations and decisions of the Bretton Woods Institutions (BWI). Ethiopia is one of the members and served as Chair recently.
In particular, the G-24 focuses on issues on the agendas of the International Monetary and Financial Committee (IMFC) and the Development Committee (DC), as well as in other relevant international fora.
At the meeting, Minister of Finance Ahmed Shide highlighted the importance of creating innovative and fast-responding financial safety net mechanisms to address the shortage of affordable liquidity countries face in times of crisis.
He supported the need for quota, representation, and governance reforms and adjustments in the IMF to ensure that emerging markets and developing countries can have access to adequate financing and decision-making power proportional to their economic weight.
