CHANGE NEEDED

THE annual meetings in Washington of the International Monetary Fund and the World Bank which take place this week do not usually attract wide attention because they are concerned with issues of such financial complexity that only well-informed specialists can follow what is happening. This year may be different, however, because a simple matter of how these institutions should be governed may come into focus. The IMF and World Bank, like the United Nations, were formed at the end of World War Two and their governing structures reflected the post-war power pecking order. But as the make-up of the global economy changes important new voices are heard calling for fairer representation. Although China, for instance, is now responsible for about 11 per cent of global GDP it has less than three per cent of voting rights in the World Bank governing body -- about the same as Britain with a much smaller GDP share. There are similar anomalies affecting Brazil, India and Russia.

Unbalanced representation of this kind eventually reflects on the usefulness of international organisations. Everyone knows that the Security Council of the United Nations does not represent the real power structure of the world today and the respect in which it is held is reduced accordingly. The situation in the IMF and World Bank is somewhat different but equally in need of reform.