The annual meetings of the International Monetary Fund and the World Bank here are feeling the heat of the collapse of the World Trade Organisation negotiations in Cancun.
While the International Monetary and Financial Committee, dwelt at some length on the progress of the trade talks, the World Bank Development Committee, scheduled to meet on Monday, will take up the issue of enhancing the voice and participation of developing countries.
What is striking, though, is the multilateral institutions' new found boldness to indulge in plain-talk and to ask developed countries to do their bit in facilitating global trade.
The failure in Cancun and the dogged resistance put up by the G-18 to the attempts of the European Union and the United States to push their agriculture plan justify the agenda of the two committees' to discuss more voting rights for developing countries.
Senior officials of the IMF and the World Bank said the Cancun failure had brought the simmering discontent within developing countries to the fore. "Trade is very important to our core concerns of development and macro-economic stability," an official told Business Standard.
In a press conference after being appointed World Bank chief economist on Friday, Francois Bourguignon said, "It is certainly very difficult to imagine that the World Bank will not say something loud to developed countries." He was responding to queries if the multilateral institutions would prevail about the US and the European Union to cut their farm subsidies worth over $300 billion a year.
Bourguignon, a French national, replaces India-expert Nicholas Stern, who is leaving the bank to become the second permanent secretary and managing director (budget and public finances) at the treasury of the United Kingdom. He has been a pioneer in the study of the links between growth, poverty and inequality.
Bourguignon said the role of the World Bank in policy directions would not be unidirectional to just ask developing countries to reform and cut tariffs and duties. "There are clear statement from the president of the World Bank that something needs to be done," Bourguignon said referring to James Wolfensohn's statements a day earlier.
While Wolfensohn refused to blame either side, he said there was an attempt to get a new equilibrium between the rich countries and the more numerous countries. "After all, the countries which were not ready to go along, represented 4 billion of the total 6 billion people on the planet," Wolfensohn said.
"I think the issue of voice is a serious one and it is an issue for our shareholders to decide in terms of voting rights. It seems to me that it would be coherent with the stand in Cancun," Wolfensohn said.