IMF Focuses on Debt Burden
The two biggest threats towards the recovery of the global economic situation are unemployment and sovereign debt which is witnessing a constant growth. Dominique Strauss-Kahn, the Managing Director of the International Monetary Fund speaking to the media following the conclusion of meeting of the IMF’s committee on policy steering said that most heads of state and other leaders are quite aware of the fact that the economic recovery is right here within hand’s reach, but reiterated that the negatives must also be taken into consideration.
Meanwhile, the World Bank recently announced a decision to give developing nations an additional three percent of voting power. This means that the more powerful countries would lose 3%, giving developing nations a total of 47% in voting power. This move comes in the wake of recommendations made at the Pittsburgh Leader’s Summit.
The IMF too is in the middle of a similar shift with regards to voting power. However, the intricacies of deciding which countries gain power and which ones lose this power is what seems to be holding back the final outcome. Financial experts cite that smaller European nations are more likely to lose voting power, due to their share in the global economy seeing a rapid decline over the last few decades. Countries like Saudi Arabia however, which comes under the title of developing nations has larger voting shares compared to its economic range. IMF’s MD stressed that the end of 2010 would see the changes in voting power in the IMF, with developing nations being given a bigger say in such matters.