All G20 summits are important, but the continuing global financial crisis has added to the weight of the one scheduled for early next month. That's why last week meeting of the finance ministers and central bank chiefs of G20 countries to prepare for the all-important summit drew unprecedented attention.
The focus of the participants at the weekend meeting was on how to tackle the financial crisis, reconstruct the flagging global financial system and reform the international financial organs. Despite differing on a variety of issues, the financial and central bank chiefs agreed to increase the funding of the International Monetary Fund (IMF) and expedite its reform.
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Muffins bearing national flags of the G20 countries are displayed in the media center before the G20 Finance Ministers' Meeting at a hotel near Horsham, southern England, March 14, 2009. The G20 Finance Ministers' Meeting kicked off here Saturday. [He Dalong/Xinhua]
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Along with these came the call of the finance ministers of Brazil, Russia, India and China (or BRIC) that the IMF has to carry out sweeping reforms to adapt to the ever-changing global financial situation. The four countries said effective steps should be taken to increase their say and representation in the world monetary body, too.
The original aim of the IMF, which became operational in 1945, was to rebuild the collapsed international monetary order and the financial market in the post-World War II era. It was also supposed to help stabilize international exchange rates and offer workable solutions to problems of global income and payment.
But its intrinsic defects caused the US- and Britain-manipulated Bretton Woods institutions (of which the World Bank is also a part) to collapse gradually despite contributing greatly to global economic stability and development. But even after the collapse of the world financial system, international financial trade and negotiations continued to be conducted within the IMF framework.
The world economy has undergone great changes since the collapse of the Bretton Woods institutions and the end of the Cold War, and the ongoing global financial crisis has laid bare the inherent defects of the IMF. These changes, coupled with the rising importance of some emerging economies have made the IMF reform all the more necessary.