As financial

ministers and central bank governors from around the world

gathered in Washington this weekend for two days of discussions

on how to revive the slumping global economy, an issue was

brought up again - - the reform of the international financial and

monetary architecture.

"The IMF (International Monetary Fund) is being given a bigger

role in the crisis. But it has hardly reformed," a press release from

the Third World Network (TWN) said here on Saturday. The TWN

is an independent non-profit international network of organizations

and individuals involved in issues relating to development, Third

World and North-South affairs.

The statement referred to the early April pledge by G20 leaders

in London to boost support for the IMF, the World Bank and other

international lending organizations by 1.1 trillion U.S. dollars to

combat the global recession.

But the biggest chunk of that amount -- 500 billion U.S. dollars

for an emergency lending facility at the IMF -- is still short of the

goal, reports said.

"There is thus the danger that its policies will do more harm to

developing countries," the press release said.

Meanwhile, IMF officials said: "Developing countries need more

flexibility to choose the macroeconomic policies that will best create

jobs, reduce poverty, and meet health and education goals."

LEADING EXPERTS IDENTIFY NEED FOR IMF POLICY

REFORM

Dr. Robert Pollin, professor of economics and co-director of

the political economy research institute at the University of

Massachusetts-Amherst, said: "The overall impact of (the IMF's

policy agenda) in developing countries is now clear -- it has led to

slower economic growth, greater inequality, more speculative

financial markets and severe bouts of financial instability."

"The priority now needs to be to supplant IMF-directed

neoliberalism with policies focused on promoting economic growth,

the expansion of decent employment and fighting poverty," he said.

Professor Georgia Saitoti, the Kenyan minister of state for

provincial administration and internal security, said: "It is becoming

more urgent now for additional resources to be mobilized in order

to target critical sectors like education for effective mitigation of the

HIV/AIDS epidemic."

"Unfortunately the strict macroeconomic policy encouraged by

the IMF undermines the capacity of poor countries such as Kenya

to fight the challenges and invest in health and education," said

Saitoti, who was also former Kenyan minister of education. "The

caps on overall national spending, enforced by the IMF policy, limit

the hiring of additional teachers."

During the previous financial crises in the 1980s and 1990s,

governments in developing countries were forced to cut spending

on infrastructure projects and social programs, Robert Zoellick, the

World Bank president, said on Friday.

The IMF board agreed to double the borrowing limits for 78 of

the poorest countries in an effort to meet the needs of developing

nations hit by the current economic downturn, the worst since the

Great Depression.

"The developed world, including the Bretton Woods Institute,

must remove the contradiction that exists between global targets for

education for all and the restrictive policies," Saitoti said.

"There should be urgency, therefore, to relax the conditionalities

and allocate more resources to the developing countries in order to

enable them to effectively meet health and education needs," he

said. "Africa has a lot of potential for contributing to the

international development. Let us examine existing policies that limit

its capacity to thrive."

PROPOSED AREAS FOR REFORM

The TWN listed key points on the reform of the international

financial and monetary architecture, saying that to enhance the role

of the IMF, the following reforms to the international fund should be

undertaken:

-- The reform of governance and voting: significant and

meaningful increases in voice and quota for developing countries on

an expedited basis than the 2011 review agreed to in the G20

communique, issued in London early this month.

-- An end to undemocratic leadership: the head of the IMF

should be selected on an open merit-based candidacy open to all

member nationalities, as committed to in the G20 communique.

-- The reform of IMF staff: the staff of the IMF are mainly from

one school of thought (neo liberal). A significant proportion of staff

should be from other schools of thought.

-- Elimination of procyclical policy-based lending: the IMF's

balance-payments loans should not come attached to policy

conditionality that is contradictory and procyclical, constraining

development objectives and needs.

-- Limited mandate of IMF: the IMF's role should be to provide

liquidity in times of payments crisis. It should end its disastrous role

in formulating and imposing policies involving trade, investment,

privatization, sectoral policies, structural policies in the international

financial field.

Although the importance of and the need for IMF reform is

increasingly recognized in the wake of the current global financial

crisis, various players do not agree on the program and focus of the

reform, observers here said.

The IMF reform is a complicated and sensitive issue and it will

not generate any major specific progress in this regard at the end of

the two-day annual spring sessions of the IMF and the World Bank,

which started on Saturday.