October 2007 IMF-World Bank Annual Meeting Essay

October 2007 IMF-World Bank Annual Meeting - Essay Example housing market, adverse credit conditions, and the rapid appreciation of some currencies could be some of the areas of concern in the days to come. Djoudi confirmed that the World Bank is defining strategic directions to address this growing threat. The World Bank would focus on good governance and financial stability frameworks, knowledge transfer, and cohesive agreements on trade and aid to mitigate the impacts. Otohiko Endo (Temporary Alternate Governor of the Bank and the Fund for JAPAN) suggested that "IMF should establish a new crisis-resolution strategy built upon the responses to the movement of private capital across borders". He said that IMF must set up a user-friendly preventive instrument, taking into consideration the views of major emerging market economies. For surveillance, he recommended that "IMF should shift its emphasis from a static analysis of the current situation toward a dynamic analysis of the risk of financial crises over a medium-term horizon". Globalization was identified as one of the other primary challenges. Globalization has brought uneven benefits to the billions in middle income countries and the developed countries are also facing the opportunities and strains of globalization. A few steps, as suggested by the participants, to mitigate the risks of globalization include: Leveraging the strengths and synergies among the four principal entities that make up the World Bank Group - IBRD, IDA, IFC, and MIGA. IDA 15 replenishment with more contribution from the World Bank. Stronger growth strategy for IFC. Better cooperation between IDA and IFC to boost the private sector in poorer economies. Price simplification and reduction for loans from IBRD. World Bank President Bob Zoellick assured that the development committee would focus on strategic direction of the World Bank Group, IDA15 replenishment, and the role of the Bank in the fight against global climate change. Infratructure is also a basic necessity in the global economic environment, a lack of which is a definite threat to growth. It is serious concern, considering that the investment in infrastructure has declined significantly in developing countries. Corruption in governments is one of the key detriments to infrastructure development. A World Bank report says that Africa could have saved $45 billion in road reconstruction costs if had spent just around $12 billion [in the late 80s] towards maintenance of the roads. So, the issue in most of the developing countries is not only lack of infrastructure, but a lack of will to invest in it, coupled with corruption. Reforms or Changes in IMF Policy The Minister of Finance for Nigeria - Shamsuddeen Usman - emphasized that the developing countries need a greater voice and representation in the two institutions, and the greater voice would come only through the quota arrangements. He called for "at least a tripling of the basic votes for the developing countries, and the other quota and voice reforms, especially using