World leaders returned home on Sept. 26 after backing a new vision for economic governance, with bold plans to fix global imbalances and give more clout to emerging giants such as China and India. They left the G20 summit in Pittsburgh with agreement to give developing countries greater voting rights at two major financial institutions - the IMF and the World Bank. The Washington Post reports the move increases developing nations' quota of representation shares by 5 percent at the IMF and 3 percent at the World Bank. Reforming the structure of those institutions is key to helping prevent future crisis, said Former IMF Chief Economist Simon Johnson. Countries such as China, South Korea and Japan began building huge reserves in the wake of the Asian financial crisis in the 1990s and their bad experiences with the IMF. "They have to believe in the IMF so they don't build huge reserves," Johnson said.
Developing countries will need as much as USD 100 billion per year until 2050 to adapt to climate change, an amount that would nearly double current foreign aid flows from developed nations, Bloomberg reported the World Bank said. Poorer nations need between USD 75 billion and USD 100 billion annually to "enjoy the same level of welfare in the future world as they would have without climate change," the World Bank said in a report released in Bangkok. Rich countries gave a record USD 119.8 billion in aid last year, according to the OECD. "The World Bank study makes plain that taking action in favor of adaptation now can result in future savings and reduce unacceptable risks," Bert Koenders, the Netherlands' minister for Development Cooperation, said in a statement. "At this point, the costs this will entail can still be borne by the international community."