ROME, Oct 7 (Reuters) The International Monetary Fund's most pressing job is deepening the role of emerging market nations in the global financial institution, the newly elected head of the Fund's steering committee said today.
Tommaso Padoa-Schioppa, Italy's economy minister, was elected last week to lead the 24-member International Monetary and Financial Committee (IMFC), which sets the IMF's political direction and overall policy priorities.
Emerging economies have long pushed for a shake-up in the governance of the institution as the fund considers an overhaul of its voting power to reflect the growing weight of the rising economic powers of Asia and elsewhere.
''Negotiations that are taking place now serve in particular to give greater recognition to the so-called emerging market nations ... I believe this is the immediate task at hand,'' he said during an interview on Italian state television RAI.
Padoa-Schioppa, in his first comments about the IMF job since being elected, did not elaborate about what kind of ''recognition'' he envisioned for the emerging economies.
Padoa-Schioppa's own election had been seen as ending the best immediate chance for emerging market nations to claim a position in the upper policy-making ranks of the IMF.
The post was widely expected to go to Indian Finance Minister Palaniappan Chidambaram, in a move that would have signaled that industrial nations were willing to cede some of their dominance in the IMF.
Still, Padoa-Schioppa said the Fund, created to assist the world economy after World War Two, needed to adapt to the times by revisiting its ''reason for existence''.
''Certainly, the (International) Monetary Fund is an organisation that needs to renew its reason for existence, its legitimacy among the (member) nations,'' Padoa-Schioppa said.
Padoa-Schiopa will head the IMFC, which usually meets twice yearly, at its next session during the 2007 IMF-World Bank annual meetings in Washington DC on October 20-22.
The newly elected managing director of the IMF, France's former finance minister Dominique Strauss-Khan, also said last week that the multilateral organisation needed to adapt to a new global economic order. He also said it should downsize.
Asked whether he saw the IMF merging with the World Bank, Padoa-Schioppa said both institutions were far too independent to think a change that severe could be around the corner.
''These are two institutions founded in the 40s, long strongly established, rooted in their traditions. I think that thesis is interesting to debate. I don't see it being acted upon in the immediate future,'' he said.
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