Saturday, September 24 2005 12:25 Hrs (IST) - World Time -

Washington: World bodies, including international financial institutions, need to be aligned to reality, Union Finance Minister P Chidambaram has said.

"All of us need to apply our minds to reinventing the UN, the IMF and the World Bank, and endowing them with a new mandate, new governance, new management and thus new kinds of behavior, which will help solve the problems that challenge, and that will continue to challenge, the global economy during 2005 to 2050," he said in a speech at Yale University.

The governance of these organizations is not aligned with present realities. The five biggest economies of the world are US, China, Japan, India and Germany. However, the present structure of the UN, the IMF and the World Bank 'disempowers' China, Japan, India and Germany in various ways, the Finance Minister said.

Chidambaram said there were four major problems faced by the global community: Delays in completing the Doha round, referring to the trade issues at the WTO, terrorism, international financial architecture and global warming.

"In my view, the three large countries the US, China and India would do well to collaborate in solving these problems," he said.

The persistence of these problems, he stressed, pointed to failures of global public goods and to the deficiencies of international institutional arrangements created in 1945, including the UN, the IMF, the World Bank, and more recently, the WTO, Chidambaram said.

The mandate of these organizations is outdated in the context of the present problems, he said, giving the example of the United Nations, which was conceived at a time when "no State actively pursued a policy of support to cross-border terrorism."