Is IMF power of persuasion enough for G20?

By Lesley Wroughton - Analysis

PITTSBURGH (Reuters) - The International Monetary Fund will have to call on all its powers of persuasion to steer the world's heavyweight economies toward their goal of more balanced global growth.

The IMF is keenly aware of its failure in 2006 to get exporters like China to increase demand at home and slower-growing economies like the United States to save more.

The following year, the start of the financial meltdown underscored how interwoven the global system is and the increased role of emerging economies powers like China.

Last week, leaders from the Group of 20 rich and developing nations agreed at a summit in Pittsburgh that the group would take over from the rich country G7 as the premier forum for coordinating economic policies.

Officials stressed that the G20 could not tell countries how to run their economies.

Instead, it will assess national economic policies and rely on a new process of peer review.

Under the plan, the IMF will forecast the impact of policies and report back to the G20 with suggested changes.

However, big countries have not always listened to the IMF's advice and there's no guarantee they will this time.