World Bank welcomes New Economic Order from the Ashes of Crisis
LARRY ELLIOTT - THE OBSERVER - GUARDIAN UK
The wrenching financial crisis of the past two years will provide the catalyst for a profound change in the global economy – which, according to the man running the World Bank, will see China and India become established centres of power, the dollar eclipsed as the sole reserve currency, and Latin America, south-east Asia and Africa emerge as new sources of growth.
But as he surveys the wreckage caused by what the bank and its sister organisation, the International Monetary Fund, agree is the most severe crisis since the devastation caused by the second world war, Robert Zoellick is surprisingly upbeat about the future.
Asked by the Observer how he envisages the global economy in 20 years' time, Zoellick says: "There will certainly be a larger role for the emerging powers, there will be multipolar sources of growth, there will be more south-south trade between developing countries.
"The crisis gives us the opportunity to hasten this process. If we are concerned about the past reliance for growth on the US consumer, we have to make sure consumers in developing countries have enough finance to buy."read more @ pimpin turtle
US calls for rigorous IMF surveillance
"The IMF will need to be a truth-teller," Geithner said in the remarks, which were to be delivered by Treasury Acting Assistant Secretary Mark Sobel.
...Geithner called the World Bank the "centerpiece" of the multilateral development system, but said it will need to focus more on building resilience to crises and laying foundations for prosperity, with a special focus on support for the poorest, Geithner said.
...He said the World Bank must more actively prioritize work on three emerging global priorities: agriculture and food security, support in the most fragile environments, and facilitating a transition to a green economy.
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UN calls for new reserve currency
The United Nations called on Tuesday for a new global reserve currency to end dollar supremacy which has allowed the United States the "privilege" of building a huge trade deficit.
"Important progress in managing imbalances can be made by reducing the reserve currency country?s 'privilege' to run external deficits in order to provide international liquidity," UN undersecretary-general for economic and social affairs, Sha Zukang, said.
Speaking at the annual meetings of the International Monetary Fund and World Bank in Istanbul, he said: "It is timely to emphasise that such a system also creates a more equitable method of sharing the seigniorage derived from providing global liquidity."
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'NEW' IMF faces rough road toward bigger role
Strauss-Kahn said these "Istanbul Decisions" would be a focal point for the coming year. "We have come a long way, but the journey is not over," he told delegates.
Strauss-Kahn urged the delegates to build on the spirit of economic cooperation at last month's G20 Pittsburgh summit and "seize this opportunity to shape the post-crisis world" and reduce poverty.
He said the fund could need more than a trillion dollars in financing from its members to function as a bank of last resort that would reduce the need for countries to build big reserves as a cushion against shocks.
Germany, Europe's biggest economy and a G20 member, balked, saying a massive increase in the fund's reserves could encourage governments to adopt risky economic policies in confidence that they could get bailed out if they failed.
"Moral hazard issues... arise from the vast increase in fund resources that is currently taking place. This increase should be viewed as a temporary measure," German central bank chief Axel Weber said.
The World Bank appealed for more funds as it sees a second straight year of record lending to developing and poor countries.
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