Re-shaping the Role of
Bretton Woods Institutions
New Progress, New Trends, New
Challenges, and New Directions
By ZOU Jiayi
World Bank Executive Director for China11
Overview
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Strengthening global economic governance is a logical
and critical response to the development challenges in
the context of far-reaching globalization.
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BWIs remains important pillars of the global economic
governance in terms of global aid architecture and
international financial architecture.
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Since Monterrey Conference, new progress achieved,
new trend developing, new challenges emerging,
calling for new directions of BWIs.
New Progress in BWIs
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Major Progress in World Bank
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Successful IDA15 Replenishment
US$ 41.6 billion for IDA15 in total, representing
30% increase over IDA14 in USD
 42% increase of donor pledges, the largest
expansion in donor funding in IDA history
 5 new donors including China,Egypt, reflecting
the increasing support from developing countries
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New Progress in BWIs
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Major Progress in World Bank
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New strategic themes under inclusive and sustainable
globalization
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Help to overcome poverty and spur sustainable growth in the
poorest countries, especially in Africa
Address the special challenges of states coming out of conflict or
seeking to avoid breakdown of the state;
Develop a competitive menu of “development solutions” for middle
income countries, involving customized services as well as finance;
Play a more active role with regional and global “public goods”;
Support advancing development and opportunity in the Arab World;
Foster a “knowledge and learning” agenda across the World Bank
Group
New Progress in BWIs
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Major Progress in IMF
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A package of reform on quota and voice
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To enhance the voice and representation of dynamic economies
and low-income countries
Whole package to be accomplished by the 2008 Bank-Fund
annual meeting
4 countries got quota increase in the 2006 Singapore Resolution
as the first step of the reform
Review on quota formula as the second step is underway.
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Preliminary consensus on four major factors of the formula:
GDP/Openness/Variability/Reserve
Refocusing and modernizing the Fund
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Working on Fund’s program with comparative advantage
Developing a sustainable income model
Lower administrative costs
New Trends in Development
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Rapid economic growth in developing
countries over recent years, leads to larger
role of developing countries in global economy
 Unprecedented close international economic
linkage brings about enhanced economic
benefits and tensions in globalization
 Implies new demand and new challenges to
global economic governance system
Challenges in General
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Need for an effective global resource transfer system to
support achieving MDGs
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Need for a more stable, reliable, and predictable international
monetary and financial environment for developing countries
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Need for sufficient supply of Global Public Goods
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Need for a balanced, effective global governance system to
coordinate different interests of countries of different
development stages and enhance common interests
Challenges At Current Stage
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Challenges in resource transfer: commitment to ODA
as a whole is not increasing
Challenges in international financial architecture
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Financial supervision: innovation V.S. stability
Flaws in international monetary system posing extra external
risks on developing countries
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Excessive global liquidity
High inflationary pressure
Dollar depreciatio
High oil/food price
Structure Adjustment of globalization
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Global imbalance and its correction
Decoupling issue
Developing and developed countries adjustment alike
Direction toward Future
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Implications to World Bank
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Stress on mobilizing development resources
Innovations on financial products, business scope, operational
modality, and development paradigm
New-type development partnership with developing countries
as facilitator of North-South, South-South and regional
cooperation
Bigger role as knowledge Bank, stay at the cutting-edge of
development knowledge from both developed and developing
countries
Mainstreaming the Global Public Good issue
Look into interactions between developed countries policies
and developing countries policies
Direction toward Future
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Implications to the Fund
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Focus on systemic issues in global level rather than
national level
Look into financial innovations and global level
regulation
The role in promoting the consistency of the macroeconomic policies of developed countries
Promote the reform of international monetary system
 Role of SDRs
Thank you!