Good morning.
I'm delighted to speak at this Plenary on behalf of Australia.
Now, I would like to first take the opportunity to congratulate and thank the International Monetary Fund and World Bank for their work in stabilising and assisting world economies through the crisis.
These meetings come at an early and fragile stage in the global recovery.
A recovery that has been underpinned by the unprecedented fiscal and monetary stimulus and financial support provided around the world in response to the crisis.
While the worst may be over, risks and challenges remain.
These challenges can be managed through a coordinated and timely approach to policy action by world economies — a continuation of the unprecedented cooperative actions of the past year.
The G20 Leaders' Summit in Pittsburgh confirmed the G20 as the premier global economic forum.
It is important that the G20 does not operate as a closed or exclusive body.
It must continue to incorporate the views of non-members into its deliberations and effectively communicate its decisions.
As a member of the G20, Australia believes it has an important outreach role within our region.
We look forward to working with our regional neighbours to maximise their engagement with the G20 process.
In the longer-term, Australia believes that a key challenge to the sustainability of world growth will be the successful rebalancing of global demand.
The G20, assisted by the IMF, has an important ongoing role in this challenge.
Through its Framework for Strong, Sustainable and Balanced Growth, the G20 will coordinate policy actions and share experiences across the world's major economies.
Australia strongly supports the continuation of coordinated work through these meetings, and through forums such as the G20, to help ensure a sustainable recovery.
Reform of the international financial institutions (IFIs)
The recession from which the world is now emerging — the worst in the 65 years since the inception of the Bretton Woods Institutions —provides a strong reminder that we need them to be truly effective if we are to meet the challenges, and reap the benefits, of globalisation.
As countries emerge from this period of economic and financial turbulence, it will be critical to strengthen these institutions to reduce the likelihood of such a crisis recurring.
Among the first priorities must be to reform the governance structures of the international financial institutions, to strengthen their relevance, their effectiveness, and their legitimacy.
These reforms must include changes to the institutions' ownership structures.
The global economy is evolving rapidly and it is important that their ownership is representative of the current global economic environment.
At the IMF, the reforms agreed in April 2008 will make an important contribution to the realignment of quotas.
Australia supports a further significant redistribution of quota shares in the new round of reforms to be agreed by January 2011.
We support the G20's call that this should include a shift to dynamic emerging market and developing countries of at least five per cent from over-represented to under-represented countries.
We support this shift being based on the current IMF quota formula.
At the World Bank, the timeframe is shorter and the task is more complex.
Australia supports developing a simple, credible, and transparent formula that primarily reflects countries' evolving economic weight and the World Bank's development mandate.
We support the G20's call for shareholding reforms to focus on increasing the shareholding of countries under-represented against such a formula.
And that this realignment should result in a significant increase of at least 3 per cent of voting power for developing and transition countries.
Achieving consensus by April 2010 will require pragmatic negotiations aimed at improving the long-term interests of the Bank and its shareholders as a group.
Australia also considers an important objective of governance reform at both institutions will be to enhance the voice of the poorest countries.
This goes beyond shareholding reforms.
The previous rounds of reforms made progress, but there is more to be done. Australia supports further reforms to increase the voice of the poorest countries through consideration of a further increase in basic votes.
Through restructuring the Executive Boards.
And through reforms to make the institutions more responsive to the needs of their members.
We must also improve the effectiveness and efficiency of the Executive Boards and their accountability to Governors.
Changes being introduced to make the IMFC less 'formalistic' are an important first step.
The legitimacy of the institutions have also, and for too long, been undermined by conventions that constrain selection of their heads and senior management to candidates of certain nationalities.
Australia supports the development of an open, transparent and merit-based selection process for the heads and senior management of all international financial institutions.
The crisis has also made clear the need for more fundamental reform of the international financial institutions.
We welcome the initiatives that the institutions themselves have already begun, including the IMF's reforms to its lending instruments and conditionality framework, the introduction of the Flexible Credit Line, and a more flexible range of instruments for low income countries.
Considerable progress has also been made in strengthening the IMF's surveillance tools.
But more progress is needed in improving the responsiveness of members to IMF surveillance.
The Bank has undertaken reforms to streamline procedures and improve flexibility, enabling it to front-load and fast-track lending resources to protect the most vulnerable.
These important changes have been backed by substantial increases in resourcing — together equipping the Fund and Bank to respond rapidly and effectively to the crisis. It will be important that lending instruments and policies continue to be adapted in response to global economic circumstances and members' needs.
Deeper changes may require reconsideration of the roles, responsibilities and mandates of the institutions in light of the crisis, particularly the IMF.
In this vein, there is merit in considering a thorough and wide-ranging review of the role and mandate of the Fund, including its Articles of Agreement, taking full account of the growing integration of the global economy.
Australia looks forward to ongoing productive dialogue with both institutions to promote global stability and sustainable development.