- The Washington Times - Friday, September 25, 2009

PITTSBURGH — The leaders of the Group of 20 economic powers on Friday afternoon will announce that the G-20 will become the world’s main economic steering committee, replacing the Group of Seven industrial nations.

The decision to funnel major economic issues through the G-20 rather than the G-7 is a recognition that the world economy is now driven as much by major developing countries like China, India, Russia and Brazil as it is by the United States, Europe, Japan and other developed nations, said delegates to the G-20 meeting here.

In light of the growing importance of major developing countries, the G-20 may also announce an agreement Friday on raising their voting share within the International Monetary Fund to at least 5 percent, said Brazilian Ambassador to the United States Antonio Patriata.

The BRIC group of major emerging countries — including Brazil, Russia, China and India — is pushing for a 7 percent increase in their voting share, while the U.S. has proposed a 5 percent increase. Mr. Patriata suggested the compromise in Friday’s communique from the group would be to give the countries “at least” 5 percent more voting power.

The increase in voting shares for developing countries would come at the expense of small European countries like Belgium and Luxembourg, which would lose their voting shares within the IMF. Currently European countries hold 30 percent of the IMF’s voting shares, an amount that is disproportionate to the European Union’s share of world economic output. The U.S. holds a 17 percent share, and that would remain unchanged.

While Mr. Patriata said the changes represent “significant” gains for emerging countries, advocates for poor countries said they still are greatly under-represented in the world’s main economic forums.

Max Lawson, Oxfam senior policy adviser, called the deal “tinkering at the edges” because it leaves the IMF as “the world’s rich country club.”

And while the G-20 is more representative of the world’s population than the G-7, “there is still no seat at the table for the poorest countries,” he said. “South Africa is the only African country included in this club.”

In a role reversal, developing countries Friday also called on the G-20 to revive the moribund Doha trade talks, saying the poorest countries have been hit hardest by the collapse of world trade in the last year.

In past years under former President Bush’s administration, the United States took the lead in pushing for a reopening of the Doha talks. But the Obama administration does not view that as a priority, and is pushing for a rebalancing of trade that likely would involve curtailing some of the trade openings previously enjoyed by developing countries like China.

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