G20 Seoul summit to discuss IMF reforms: Russian expert
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Leaders gathering at the upcoming G20 Seoul summit will, among other things, discuss additional reforms of the International Monetary Fund (IMF), says an expert from Russia's leading think tank.
The G20 leaders have made some important achievements at their previous summits, including the consensus reached concerning the stimulus package, the framework for sustainable and effective economic growth, and some major reforms of the IMF, Marina Larionova, head of the Moscow-based International Organizations Research Institute, said during a recent interview with Xinhua.
The latest decision adopted by the IMF's governing board on increasing quota shares of emerging economies and developing countries was also an important achievement, Larionova said. The decision will have to be confirmed by the G20 leaders in Seoul.
French President Nicolas Sarkozy, whose country was scheduled to take over the G20 rotating presidency following the Seoul summit, would obviously further this agenda, she said.
The IMF has adopted two additional mechanisms, one supporting economies in crisis with so-called financial safety net and the other redistributing quota shares in favor of developing countries, which may surpass six percent, Larionova said.
"This is more than they agreed in Pittsburgh," she said. "Of course, this is not enough for developing countries, but this is some shift forward."
"The third achievement which might be skeptical, however is the change in the governing board," she said.
Members of the European Union earlier sacrificed two seats in the 24-member executive board in favor of developing countries, she said, but "so far it is still not clear which members will leave the board and in what order, and which countries will take over."
She said the issue will have to be resolved at the G20 summit, which will be held Thursday and Friday, and during subsequent IMF meetings.
Larionova said the G20 leaders have intended to make a number of new commitments through a multi-year action plan on development, focusing on investment and stimulus measures to support growth in developing countries.
However, the expert warned of the risks that the broader the agenda G20 members adopted, the more criticism they may face as being ineffective in concrete actions.
The G20 leaders will also discuss energy aspects, fossil fuel subsidies and corruption apart from financial and economic topics, she said.
In particular, they may discuss tensions over the American decision to stabilize the U.S. economy by printing extra greenbacks to buy 600 billion U.S. dollars in Treasury bonds over the next eight months.
Some experts have voiced concerns for possible currency wars, but Larionova believed Russia would not take participate.
"Russia is as interested as the other G20 members in balancing the current accounts, the trade flows, limiting at least reliance of Russian population, Russian business and international business on one currency," she said.
Larionova said currency wars would not be a topic of the agenda at the Seoul summit, because "the chair -- the South Korean presidency -- is very cautious of this, even though the exchange rate flexibility will be discussed."
