WASHINGTON - Developing countries have expressed strong dissatisfaction with their current "under-representation" at the World Bank and the IMF, warning that they are losing their significance.

"We have a situation that a small number of countries are controlling these institutions," said Ariel Buira, director of the Intergovernmental Group of Twenty Four (G24) on International Monetary Affairs and Development Secretariat in Washington.

The main problem is that there is no democracy within these institutions. What we need is an increased voice of the developing countries within these institutions to make decisions and have an equal say in their implementation.

Candido Gryzbowski of IBASE, Brazil

"They make the rules while the majority of the members follow themà If the relevance of these institutions has to be maintained, we need reform," he said.

Buira was speaking at a press conference announcing the statement of the 74th meeting of the G24 ministers.

The G24 meets twice a year, preceding the Spring and Fall meetings of the International Monetary and Financial Committee (IMFC) and the Joint Development Committee of the World Bank and the International Monetary Fund (IMF). The plenary G24 meetings are addressed by the heads of the IMF and the Bank as well as by senior U.N. officials.

The G24 was founded in 1971 "to concert the position of developing countries on monetary and development finance issues". It is constituted of 24 countries from the three regions of Africa, Latin America and the Caribbean, and Asia.

The ministerial meetings of the G24 have traditionally released documents at their conclusion, which set out the consensus views of member countries on issues that particularly interest them. The Ministerial document is released as a public communiqué to the press.

This year, the communiqué, apart from calling for greater representation, has also expressed support for canceling the debt of 18 countries, proposed by the Group of Eight (G8) most industrialised countries earlier this year. It has urged that this deal "be extended to include all low-income countries".

However, agreeing with a statement by the World Bank President Paul Wolfowitz Thursday, the G24 does not want the deal to erode the resources of the International Development Association (IDA), the World Bank agency that gives some nine billion dollars a year in concessional loans to poor countries.

It is noteworthy that Wolfowitz said Thursday that the concerns of some developed countries like Belgium and Norway about depletion of IDA resources in fulfilling the commitment made by the G8 are "valid". The G24 said Friday that "debt relief should not erode the IMF's and IDA's overall financial integrity, nor create an additional burden on other countries borrowing from the IMF".

Civil society organisations are sceptical that these reasons may be given to water down the G8 commitment of full debt cancellation and may prove a hurdle for any future prospects of debt relief for other countries.

"It is essential that developing country governments speak out openly in favour of the debt deal and oppose any moves that may prevent it from becoming a reality. The World Bank and the IMF are dominated by the rich and when the poor have an opportunity to speak, they should take full advantage of it," says Poonam Kaushik, a trade unionist from India.

Critics claim that measures that would stop the debt cycle will be more likely if the World Bank and IMF have more democratic governance structures. This implies that the attempt to fight poverty in the developing countries is related to their representation at these institutions.

"The main problem is that there is no democracy within these institutions," says Candido Gryzbowski of IBASE, Brazil. "What we need is an increased voice of the developing countries within these institutions to make decisions and have an equal say in their implementation."

"The system as it stands right now favours rich countries and big private companies. Unless there is more democracy in these institutions, nothing will go forward," he said.

According to the G8, developing countries account for half of the global gross domestic product measured in terms of purchasing power parity. These countries also have the majority of global resource reserves, along with the fact that the majority of the world's population resides in these countries.

Therefore, the G24 ministers have reiterated that "a new quota formula is needed to reflect more accurately the relative economic size of developing countries in the world economy". They have asked that developing countries be "adequately represented on the staff of the two institutions, both in number and in key positions".

Another important issue raised by the G24 this year is the "lack of progress" in the achievement of the Millennium Development Goals (MDGs).

The MDGs include a 50 percent reduction in poverty and hunger; universal primary education; reduction of child mortality by two-thirds; cutbacks in maternal mortality by three-quarters; the promotion of gender equality; and the reversal of the spread of HIV/AIDS, malaria and other diseases.

In order to achieve these goals, it is essential that increased aid and financing from the developed countries be channeled to the developing world along with a rise of investment to increase growth. The ministers also stressed that the 0.7 per cent of gross national income as the U.N. target for donation by developed countries should be met at the earliest date.

This is not the first time that the G24 has called for reform of the international financial institutions. The failure of the institutions themselves to take heed may be reflective of the fact that developing countries hold limited voting power in the institutions themselves. Indeed, the press conference itself announcing the communiqué was poorly attended, reflecting the media's apathy to these concerns.

"This is a case of the chicken and the egg," said Hope Chu of the 50 Years Is Enough Network. "In order for there to be governance reform, countries in the Global South need better representation at the World Bank and IMF board of directors. But this is not possible without governance reform in the first place."

© 2005 IPS - Inter Press Service

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