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IMF wants meeting to focus on Asia's financial recovery

Asia's recovery from the 1997 financial crisis carries a message of hope that the IMF and World Bank plan to highlight during their annual meetings in Singapore.

While the question of whether a decision to give more voting power to China, South Korea, Turkey and Mexico will be ratified by the IMF board of governors is commanding attention, the institutions regard Asia's rebound as an example to be heeded.

The world's financial elite of bankers, finance ministers and heads of state are among the 16,000 delegates expected at the meetings from Sept. 11 to Sept. 20 amid elaborate security precautions highlighting fears of a terrorist attack or violent protests.

Although the World Bank asked the Singapore government to allow outdoor protests, the city-state has been adamant in confining accredited groups to an area in the lobby of the Suntec convention center, the venue for the sessions.

Showcasing Asia's ability to emerge from its worst financial crisis will be a key focus, said Peter Stephens, the World Bank's representative in Singapore.

The crisis which started in Thailand and rapidly spread prompted foreign investors to pull their funds out of the region on concerns over mounting debt in both the public and private sectors, triggering one of the area's worst recessions.

Hardest hit were Indonesia, Thailand, the Philippines, Malaysia and South Korea.

"We're seeing Asia integrate much more rapidly than anybody predicted a decade ago," Stephens said.

The changes are "so profound" that Asia could almost eliminate poverty over the next 25 years.

"If it could happen in Asia, there is no reason why it cannot happen in Africa and Latin America," he added.

With foreign investors storming back, analyst Terence Tong mentioned how firms beefed up corporate governance and transparency. Many of the countries have accumulated large foreign reserves to prevent a future crisis, making them less dependent on the IMF.

Although the fund's board of governors is expected to ratify the plan agreed upon last week by the IMF directors to give more voting power to developing countries, managing director Rodrigo Rato said major emerging countries from the Middle East and Asia opposed it.

Under the plan, China, South Korea, Turkey and Mexico will see immediate increases in their voting rights, better reflecting their economic power, Rato told Asian journalists in a recent Internet linkup from Washington.

There is agreement that a new formula for quotas, the amount of money each of the 184 member countries contributes to the IMF, be based on economic size. Quotas determine a country's voting power and access to financing.

Rato said he believed "all members recognize that relevant quotas and voting shares do not adequately respond to the reality of the world economy."

Voting rights have changed slowly since the fund was established in 1945.
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