that is increasingly becoming complex and competitive. globalisation also affects international financial markets, where the amounts traded are becoming larger and more diverse. you will recall that the managing director, mr de rato, underscored the point when he characterised these developments in his recent speech to the bretton woods committee, as a “ torrent of change ” 2. faced with this torrent of change, the alternatives are either swimming or sinking, as drifting is not an option. changing balance of economic power related to the globalization process is the fact that, in recent times, the world has witnessed a change in the balance of economic power. observers suggest that 50 years ago, 60 percent of global gdp had come from within the original g7 countries and the balance from the rest of the world ; but now the situation has reversed. there is no doubt that this change is a challenge to the bretton woods institutions. for instance, it so happens that no advanced industrialised country has borrowed from the fund for more than 20 years, and yet these countries tend to dominate decision - making. on the other hand, other members of the fund expect the institution to deliver on its mandate fairly and equally to all the 185 members. it is in this context that there remains the legitimate expectation that, in time, there will be a reform of the voting system so that developing countries, a large number of which are in africa, can be in a position to influence policy in a meaningful manner, both in the fund and world bank. indeed the role of china and other countries in its league, as major economic players in the world, has made it imperative and urgent to change the quota system. hence the decision of the fund ’ s board of governors to increase the voting power of china, korea, mexico and r. de rato, “ steering a course through the torrent of change : principles for reform of the international monetary fund ”. speech to the bretton woods committee, 12 june 2007. turkey. while this is a laudable decision, a lot more needs to be done on the fund ’ s quota system and, therefore, voting power, so that it can be reflective of the member countries ’ economic weight, while ensuring that the voice of low income countries can have a meaningful impact in decision - making. quota reform while the fund ’ s medium term strategy has several complementary elements, the centre piece is still the issue of quota and voice reform. it was heartening to see that some progress is being made

. in this regard, only a few weeks ago, the independent evaluation office reported on exchange rate surveillance for the period 1999 - 2005 and concluded, among others, that “ the imf was simply not as effective as it needs to be in both its analysis and advice, and its dialogue with member countries ” 5. this shows that, in this case, there is unanimity that there is need for change. a. mirakhor & i zaidi ( 2006 ) “ rethinking the governance of the international monetary fund ” imf working paper wp / 06 / 273. r. cooper & e. truman e. ( 2007 ) “ the imf quota formula : linchpin of fund reform ”. independent evaluation office ( 2007 ), “ imf exchange rate policy advice, 1999 - 2005 : an ieo evaluation ”. on a related matter, the policy support instrument ( psi ), which was introduced in october 2005, was in recognition of the fact that fewer countries need to borrow from the fund. while it is acknowledged that one contributing factor to the reduced need for fund lending is the extent of success of imf programme implementation in the past, this reduced recourse to fund resources should not lead to member countries ignoring the fund ’ s reform programmes and policy advice, because doing so would be counter - productive. i hasten to add that, although not a borrower of fund resources for programme assistance, botswana values her long - term partnership with the fund. there is absolutely no doubt that fund advice has largely been beneficial ; so too has technical assistance. however, in the advent of the psi, we should ask whether it has moved far enough from the poverty reduction and growth facility ( prgf ). is there still too much prescription and not enough discussion? is the fund ’ s endorsement of policies still so important for member countries, given the increased opportunities for funding provided by financial globalisation? and what are members to do when the assessments by the fund and world bank differ radically? it will be interesting to see the number of countries, if any, that have so far taken advantage of the programme, now that the psi fact sheet is published on the imf website. furthermore, the fund needs to change its approach to surveillance and, accordingly, some important structures of the fund, such as the imfc, have suggested that surveillance needs to become more advisory than prescriptive. it is felt that such an approach would encourage country ownership of decisions resulting from