It may also reflect the frustration of some key countries with what they see as a slow evolution of the decision-making bodies of the IMF in response to changes in the composition of the world economy and the rise of new economic powers. International policy cooperation has thus moved out of statutory bodies and into groups of a select few, bypassing established channels and fora. Other countries do not participate, directly or indirectly, but are called upon to contribute to efforts that others have agreed. The G20 discusses and aims to agree on changes in IMF governance. The vast majority of the membership of the IMF has no voice or representation in these discussions, including all lowincome countries and most emerging economies. If they are not addressed effectively, the large and growing global imbalances that contributed to the current crisis are likely to widen anew. This would again put at risk the stability of the global economy. Linked to these prospects are the continued rigidity of important exchange rates and excessive reserve accumulation leading to the build-up of unsustainable debt. I agree with those who have said that in recent years, the international monetary system failed to promote timely and orderly economic adjustment. 7 Global capital markets failed to channel surplus savings in emerging market economies into profitable longterm investment in wealthier countries. It would seem that we still risk repeating recent failures. Let me also mention another concern. Mercantilist attitudes may also gain ground in surplus countries.
Norway is recovering sooner than most countries, and Norges Bank was among the first central banks to raise its key policy rate. It did so twice in late 2009, up to 1.75%. As a global investor and an open market economy, my country shares the interests of most market participants, large and small. We have a common interest in a market-based international order, supporting a level playing field and sound economic governance. Like many other countries, we have benefitted greatly from economic and financial globalisation. It has delivered prosperity and growth without precedent. In the midst of the crisis, these gains must not be forgotten. The multilateralism of Bretton Woods At the end of the Second World War, 45 countries agreed to establish a new international financial and economic order with the Bretton Woods Institutions, the IMF and the World Bank, at its center. In his inaugural speech to the Bretton Woods Conference in 1944, US Treasury Secretary Henry Morgenthau noted the following: “We know that economic conflict must develop when nations endeavor separately to deal with economic ills which are international in scope. To deal with the problems of international exchange and of international investment is beyond the capacity of any one country, or of any two or three countries. These are multilateral problems, to be solved only by multilateral cooperation. They are fixed and permanent problems, not merely transitional considerations of the postwar reconstruction.