Panel Calls for Greater Asian Role in International System

Asia’s status, influence in global economy have substantially increased

Capital flows have to be tackled at both originating and receiving ends

Special drawing rights need to be more representative of multipolar economy

Speaking at a panel discussion on reforming the international monetary system, France’s Finance Minister Christine Lagarde said the current system worked for many years until the global economic crisis, but in the face of capital flows and liquidity problems the world needs a system that is more in synch with the real economy.

“It requires a lot of good will, because improvement will require compromises,” she said. “We will have to come up with pros and cons and a more comprehensive approach to the issues.”

The international monetary system is the set of internationally agreed rules, conventions, and supporting institutions that facilitate international trade and cross-border investment, and the flow of capital among countries. In the wake of the global economic crisis, a number of leading economists, policymakers, and several groups, including the IMF, have offered a variety of perspectives on problems in the international monetary system and how to reinforce it.

France, as chair of the G-20 group of leading advanced and emerging, coorganized the panel along with the Asian Development Bank (ADB), International Monetary Fund (IMF), and Japanese Finance Ministry.

It was held as part of the ADB’s 44th Annual Meeting of the Board of Governors, being hosted this week in Hanoi, where about 4,000 policymakers and officials from government, finance, the private sector, academia, journalism, and civil society are meeting against the backdrop of fears over rising global imbalances.

Greater responsibility

“Asia’s status and influence in the global economy have substantially increased—that means it must accept greater responsibility in global and financial affairs,” said ADB President Haruhiko Kuroda, pointing out that the G-20 now includes six Asian countries. “Already, in some sense, the global community has recognized the importance of Asia. What is needed is greater responsibility.”

Kuroda also highlighted the need for consensus on international monetary system reforms among the IMF’s 187 member countries.

IMF Deputy Managing Director Naoyuki Shinohara pointed out that the IMF has taken several steps in response to the financial crisis, including increasing the quota for underrepresented countries and overhauling its...