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Unformatted text preview: tes will inc reas e to 3.81%, s till far s hort of its weight in the world
ec onom y. Meanwhile, old power patterns s till determ ine who holds the two top jobs : the
www.economist.com/node/11664289 3/9 1/14/14 Who r uns the wor ld?: Wr estling for influence | The Economist bank is run by an Am eric an, the fund by a
European. But a bigger problem for both
organis ations is relevanc e.
Until the late 1990s the IMF, m onitor of exc hange
rates and lender of las t res ort to s truggling
governm ents , had plenty of work. But em erging
ec onom ies , onc e its c hief c lients and s ourc e of
earnings in repaid interes t and loans , are thes e
days often awas h with their own c as h. Earlier this
year the IMF board voted to c ut s taff and s ell off
about an eighth of its gold res erves (s om e 400
tonnes ) to m eet expec ted future funding s hortfalls .
W ith no obvious role in c oping with the afterm ath
of the rec ent banking and s toc km arket turbulenc e,
its future role m ay be m ore as an expert
ec onom ic advis er.
Som e worry that the world m ay s till need a lender of las t res ort. Critic s think the fund's days
s hould be num bered and its res erves put to better us e for developm ent. Still others m us e
that what is needed is a W orld Inves tm ent Organis ation, to s et bas ic rules and better trac k
the huge and c om plex flows of c as h that now was h around in hedge funds , s overeign
wealth funds , banks and financ ial m arkets .
The W orld Bank has a m ore c ertain future, but s till needs to retool. Com petition has
s tiffened from private c apital m arkets . Many governm ents that onc e needed the bank's help
for dam s , roads and other big projec ts are earning plenty from the s ale of raw m aterials .
Even in Afric a, the readines s of China and India to s pend liberally without s trings in purs uit of
oil and m inerals m eans that the Sudans and the Congos c an take the bank's c as h and
ignore the c onditions attac hed.
Yet the bank s till has a role lending to unfas hionable c aus es , or c ountries whic h donors
neglec t. It c ould als o provide...
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- Summer '08