BEIJING – In March, at a meeting in Beijing organized by Columbia University’s Initiative for Policy Dialogue and China’s Central University of Finance and Economics, scholars and policymakers discussed how to reform the international monetary system. After all, even if the system did not directly cause the recent imbalances and instability in the global economy, it proved ineffective in addressing them.
Reform will, of course, require extensive discussion and deliberation. But the consensus in Beijing was that the G-20 should adopt a modest proposal this year: a limited expansion of the International Monetary Fund’s current system of Special Drawing Rights (SDRs). This proposal, while limited in scope, could play an important role in initiating discussion of deeper reforms while helping to restore the fragile world economy to health and achieve the aim expressed in the G-20’s Pittsburgh declaration: strong, sustainable, and balanced growth.