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October 7, 2009

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IMF calls for more power in a crisis

THE International Monetary Fund said yesterday that it needs greater powers to anticipate and handle any future economic crisis.

The statement came as protesters facing police water cannons and tear gas claimed the fund was merely helping rich countries.

"This crisis had very little to do with current accounts and currency movements, the traditional focus of the fund's attention," said Dominique Strauss-Kahn, the IMF's managing director.

"In an era of high-volume and fast-moving capital flows that can extend to every corner of the world, we need a broader mandate," he said at the plenary session of the annual meetings of the IMF and the World Bank.

He said the IMF's mandate needed review, assessing all policies that affected global economic stability.

The conference center hosting the meetings in Istanbul was heavily guarded, and protesters were kept well away.


In a nearby shopping district, however, hundreds of stone-throwing demonstrators clashed with police and some masked protesters shattered the windows of a McDonald's restaurant and several Turkish and foreign banks.

IMF and World Bank officials, along with finance ministers from rich and developing countries, have held several days of talks, with much of the discussion focusing on proposals for voting reforms that would give developing nations more say.

Those internal changes would reflect the growing clout of emerging market countries in the global economy.

The IMF, in which the United States has the biggest voting share, has faced accusations that it imposes austerity measures in exchange for loans without regard for the social impact on the poor. The group has sought to show more flexibility in recent years, citing a willingness to give developing countries a bigger say in its decision-making process.

Turkish Prime Minister Recep Tayyip Erdogan noted the tension between rich and poor countries, saying voices of protest must be heard.

"While a part of the world is consuming limitlessly, the other part of the world is fighting to stay alive because of hunger," he said in a speech at the IMF meeting. "We must lend an ear to the screams that arise from the world, to demands and to protests that are going on outside this hall."


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