Talk of reform rarely results in concrete action at entrenched institutions until their very survival or legitimacy is under threat. Critics have argued for years that the International Monetary Fund must review its arcane voting rights to better represent the growing influence of emerging economies. Belatedly, there appears to be a significant movement in that direction.
Little of substance emerged from meetings between the finance chiefs of the world's most industrialised nations at the two-day Group of Seven summit in Rome besides promises to ward off the spectre of protectionism. But one of the more significant topics under discussion was a revised proposal to give developing countries a greater say in the IMF. Under it, a decision-making council would comprise ministers with voting rights in proportion to contributions their countries make to the fund and aligned with their relative weight, and the role they play, in the global economy. It has taken the global economic meltdown and the need to work with countries such as China to make this happen.
Without doubt, the fund still has an important role to play in the world economy, as shown by emergency rescue loans it has extended to collapsing economies from the Baltic to Central Europe during the current crisis. But it cannot reinvent itself and secure greater legitimacy without the financial resources and political support of emerging powers. As Hillary Rodham Clinton said on the eve of her maiden overseas trip to East Asia as US secretary of state, there is a need to work closely with developing countries such as China on a broad range of issues - not only to tackle the economic crisis, but also global security and governance. If so, emerging powers must be allowed to play a greater and more constructive role in multilateral institutions such as the IMF.
However, reforms at the fund have been painfully slow. Since it bungled its handling of the Asian financial crisis more than a decade ago, the fund has had to fight to re-establish its relevance. In the intervening years, more member countries have withdrawn their political support; others have cast doubt on its policy recommendations and questioned its legitimacy. Many people, not without justification, consider the fund a tool of rich western countries.
In April, member countries voted overwhelmingly to give more votes to developing nations. But that meant the rich nations gave up a small fraction of their voting rights - equal to 1.6 percentage points - to developing countries. So with 15 per cent of the IMF's membership, they will still control 60 per cent of voting rights. The message they sent out is clear. Though their economies have triggered the worldwide financial crisis, they still want to retain leadership in the global economy. The new reform plan - which will be debated intensely in the run-up to the Group of 20 meeting in London in early April - must go further. For the fund to restore its legitimacy and influence it must share power more equitably among the major and emerging economies.
Emerging powers such as China and India now have a chance to help shape the world's agendas, which have long been dominated by the rich and powerful west. But this also means they must accustom themselves to thinking about, and balancing, the needs and demands of the rest of the world. They must learn to take up the broader responsibilities that come with global stewardship.