Trevor Manuel, South Africa's finance minister who this year chairs the boards of governors of the International Monetary Fund and the World Bank, will seek to accelerate reform of the two institutions at their annual meeting in Prague next week. In an interview, Mr Manuel said he wanted to address the vexed issue of voting rights for poor countries, as well as the way the IMF and the World Bank implemented their lending programmes in the developing world. He did not expect instant results in changing the voting system, which gives overwhelming influence to rich countries, partly because of their large share in global economic output. But he wanted to prick the consciences of other governments and persuade them that the present system gave too small a voice to the poor. Mr Manuel said it should be possible to explore new criteria for voting powers and board representation. "That would be an important issue because if 43 African countries no longer had just 4.38 per cent of the shareholding, perhaps the influence would be somewhat different. "It seldom comes down to voting on percentages, but I think you must accept there is a huge division. You have to see this as a great inequality in access to decision-making in the institutions," he said. Mr Manuel is likely to have more success in helping to change the way lending programmes are implemented, because both the IMF and the World Bank have recently admitted to shortcomings in this area. Unlike many of the protesters expected to demonstrate in Prague, Mr Manuel will not be calling for the abolition of the institutions or an end to loan conditions. However, he will criticise attempts to "micromanage" the economies of sovereign states. In one such case they went as far as dictating details of doctors and medicines to be provided at rural health clinics in Mozambique as part of a debt relief plan. "In an arrangement of financial intermediation, you will always have conditionalities and you also will have risk appraisal," he said. "But there is often a fairly punitive side to the manner in which the fund especially addresses these issues." While the heads of the World Bank and the IMF were keen on reform, staff members remained "recalcitrant", Mr Manuel said. He acknowledged that African countries needed to improve their governance, but said any improvement could be undermined by insensitive IMF conditions. "You'll find staff in the fund would instruct a country to replace its legislation overnight," he said. "If people behave like that, they don't understand what processes in a democracy are actually all about." Mr Manuel said: "People in these institutions develop a paradigm. One of the paradigms in Kenya, for instance, is that Richard Leakey [the white head of Kenya's civil service] has to be a saviour. 'He stands out, he's not corrupt, he needs to take on the public service, we need to maintain him in that position.' What you're also subtly suggesting is that you blacks are just corrupt, you need a white foreman to deal with this. "In the context of Kenyan politics, that is highly insensitive. But if your intention from Washington is to try to micromanage everything that happens in an economy then you tend to make those kinds of mistakes." Mr Manuel, who has won praise from international investors for his handling of the South African economy, said there had been a quiet shift within the World Bank and the IMF and that the IMF's own economic reports had recently begun to focus more on poverty and inequality. Such concerns echoed those being voiced at the UN's millennium summit. "It's important to recognise that this growing inequality in the world has got to be a threat to world peace, to development, to the growth of markets - all kinds of things," he said. "And it would be wrong for that to be a UN issue without it being something that economic policymakers need to consider as well."
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