The IMF and the World Bank are becoming relics of a bygone era. They are too narrowly focused on Europe and America.
Major international crises often produce tectonic shifts in international relations. Under pressure from key European counterparts, President Bush has agreed to a "new Bretton Woods" summit on Nov. 15.
It would be hard to overstate the potential significance of this meeting. The first Bretton Woods, in 1944, set the rules for monetary relations among nations, and it created the International Monetary Fund (IMF) and the World Bank.
While European leaders are pushing for greater regulation and a major overhaul of the international financial order, US policymakers have been lukewarm, emphasizing the preservation of free-market capitalism. This transatlantic drama has obscured the more fundamental problem – how to accommodate the historic shift of economic power away from the West toward Asia.
Including India, broader East Asia encompasses more than half of the world's population. The region already accounts for about one-third of global economic output, oil consumption, and CO2 emissions, and this is only likely to grow in the future. Over the course of the 21st century, Asia's economic and geopolitical weight in the world will, in all likelihood, come to rival that of Europe in the 19th century. Asian problems will become increasingly indistinguishable from global problems.