There is little doubt that the poor pay a disproportionately high price for every disruption of the international system.
This fact underlines the need to carry out significant reforms to yield solid, effective and sustainable world financial governance that can act as a decisive instrument to shelter the poorest and assist in their recovery and development.
Time is of the essence, and it is imperative that world financial authorities agree on the basic elements of a new financial architecture expeditiously. The basic elements of reformed international financial institutions should entail the immediate implementation of the decisions adopted unanimously in Hong Kong in September 1997 by the Interim Committee of the International Monetary Fund (IMF) extending the mandate and jurisdiction of the IMF to all financial transactions beyond its present mandate for current account transactions and monetary issues.
The roots of the current slowdown, like its forerunners in the Mexican and Asian crisis, lie in disorderly developments in the financial sphere. The moment has come to expand the role of the IMF to supervision of this area.
The enactment of this agreement will provide the IMF with the needed mandate and jurisdiction to play a central role in global surveillance of financial developments. Under such an arrangement, the IMF would initiate and coordinate the adoption of necessary regulations. If these changes are not implemented, we would run the risk of a recurrence of the unacceptable abuses of recent years. In contrast, adoption of these reforms would help to regulate financial transactions, making them to better contribute to stable and sustainable world growth.
The magnitude of the responsibilities mentioned above would require that the IMF is reformed to ensure it is more inclusive. Two steps are needed for that. The important question of the "voice" of the poorest in the Boards of the IMF and the World Bank should be imaginatively and boldly reopened to make sure that their concerns are decisively taken care of.
It is vital also that we put in place the supreme decision-making body envisioned in the Jamaica amendment of the IMF Article of Agreements.
This reform would transfer to a newly created "Council" the major strategic decisions presently in the hands of the Board.
This Council's composition will be at the highest political level - ministers or governors - meaning it would confer all the needed authority to the decisions adopted. The Council would among other things replace the current IMF Committee which only plays a consultative role.
This would lend the actions of the IMF the strongest possible political clout, provided ministers and governors accept the corresponding obligation to involve themselves as deeply as is necessary in the life of the institution.
Finally, to ensure that all the countries are represented fully in global decision making, it would be highly desirable that on the occasion of its annual meetings, the G8 be broadened to include the heads of States or governments of the other countries represented in the governing bodies of the Bretton Woods institutions, together with the Secretary General of the United Nations and the heads of the other relevant multilateral organisations. This would be an effective way to put in place a "global governance council" that would not only allow greater sharing of responsibilities but would confer to the new global financial architecture the highest credibility, legitimacy and influence.
Michel Camdessus is the former managing director of the International Monetary Fund and a member of the Africa Progress Panel.