This year’s IMF-World Bank annual meeting comes at a time when the organization is at a turning point. The IMF must reform and adapt to the problems of today, including new types of economic crises, and changes in the global balance of power with “emerging economies” such as India and Brazil taking on a bigger role in international economic forums.

Critics also accuse the IMF of a Western bias, a charge the organization must address. Since the fund was established in 1944, its director has always been European or American. Today, countries such as India, China, Russia and Brazil no longer want -or need- the fund telling them what to do.

The other problem is related to the IMF’s goals. One of the main missions of the organization is to keep an eye on global financial system and function as a lender of last resort for developing countries. But the IMF’s shrinking budget has constrained its ability to fulfill its mission in recent years. Over the past three years for instance, has decreased from 80 billion USD in 2004 to 11.8 billion in 2007.

This puts the IMF -- an institution that lectures nations about managing their finances -- in the embarrassing position of running deficits due to declining operational budgets. The solutions – which include staff cuts and considering the sale of gold to meet expenses – should be familiar to IMF officials.

The other key issue at the heart of this year’s meeting concerns global exchange rates. On the one hand, European officials worry that the strength of the euro, against the US dollar, is undermining European exports. On the other, is the depreciating Chinese Yuan. The United States as well as the EU have been putting pressure on China to let its currency rise in value against the euro and the dollar in order to boost US and European exports.