Christine Lagarde, managing director of the International Monetary Fund and a former French finance minister, faces trial for accusations of negligence. However, that has not undermined her recent declaration of her candidacy for a second term, which representatives of some of the IMF’s major member countries swiftly endorsed.
Five years ago, a number of global powers struck a deal to overhaul the way the International Monetary Fund (IMF) conducts business. This week the IMF officially approved those governance overhauls and put the agreement into action, giving emerging economies more of a say in its operations. The agreement has been dubbed the “quota reforms.”
By 2030, the world will invest an estimated $57 trillion in infrastructure improvements. Many of these improvements will be made by way of what is known as a public-private partnership (PPP), in which governments will partner with private sector interests. This allows a government to leverage the expertise and capabilities of the private sector to achieve public policy goals. However, these partnerships do not always go entirely smoothly, often hindering progress and leading to expensive disputes.
China served as a major topic of discussion and a primary source of concern at the World Economic Forum. However, several speakers went to great lengths to defend Asia’s largest economy and to point out that it is still moving toward strong growth and a “manageable” economic transition.
No Cliff
The China-sponsored Asian Infrastructure Investment Bank formally launched over the weekend. Many observers have seen it as a rival to the World Bank. Others saw in another vehicle used to facilitate the internationalization of the Chinese yuan.
We have consistently argued that these ideas are a serious exaggeration. News that AIIB will lend only US dollars supports our claim. It seemed obvious that most members would fund their quota in dollars. It also seemed obvious that most borrowers would have little use for yuan.
For years, the World Bank has represented the only serious player on the block when it comes to raising national level finance needs. However, the World Bank now has a rival in the form of a Chinese organization known as the Asian Infrastructure Investment Bank (AIIB). The new bank’s headquarters is in Beijing, China, and is considered by many to be little more than a direct challenge by China to the supremacy of the World Bank and the economic clout currently held by the United States.
The prospect of hosting any mega-event – especially the Olympic Games – is cause for serious consideration. At local, national, and international levels, the discussion takes shape around two key questions: is it worth it? And if so, for whom?
The US Senate recently agreed to changes to the International Monetary Fund’s voting rights. This ratification redistributed voting rights to give emerging economies a bigger role in the affairs and policy decisions of the international lender. Thanks to these reforms, China’s stake in the IMF’s affairs increased by almost 60 percent.
The World Bank has come under fire recently for policies and practices that many consider shortsighted and insensitive to the less fortunate. A glaring example involves the World Bank’s failure to provide oversight of development projects that force people from their lands and/or harm their means of making a living. However, after years of delay, the World Bank has announced that it will take action to address these social issues.
If given the option to choose an economy that is the largest non-World Trade Organization (WTO) member, most people would not guess Iran. Most people would be wrong.
