Hosted by the New Rules for Global Finance coalition, this meeting summarised the findings of a year-long series of consultations held in five cities on issues of global finance and governance of the IFIs. The consultations were organised as part of the follow-up to the Monterrey conference on Financing for Development (FfD) held in 2002. Monterrey participants felt there was insufficient official follow-up, so the UN’s FfD office pushed for consultations on so-called ‘systemic issues’ (led by the New Rules for Global Finance coalition), debt (led by the UN itself) and investment climate (led by the World Economic Forum). The UN secretary-general made a summary of the three consulations and proposed next steps for presentation at the UN World Summit in New York in September. The FfD +5 conference is planned for Doha, Qatar, in 2007.
The ‘systemic issues’ report deals with policies for crisis prevention and crisis management and recommendations for reforming the governance structures of the World Bank, IMF, WTO, as well as other financial agencies such as the Bank for International Settlements. On crisis prevention, the report has detailed recommendations on prudential regulation, and emphasises the need for counter-cyclical policy. Crisis management proposals include a sovereign debt work-out framework, a dialogue facility for creditors and debtors, a recommended increase to IMF resources and the creation of a crisis lending facility.
On governance of the Bank and Fund, the report argues for the use of purchasing power parity in the calculation of quotas; an increase in basic votes; and 2 additional seats for sub-Saharan Africa. Other recommendations include reforming leadership selection, the use of double majorities in board voting and increased transparency in board discussions and the actions of executive directors.