The credit crisis will spark a long-awaited overhaul of the International Monetary Fund by forcing nations such as the United States and Britain to acknowledge they lack moral authority to guide the world economy unchallenged, former prime minister Paul Martin predicts. "The rich countries cannot claim any longer that they have a moral hold on virtue here. If the subprime crisis hasn't opened people's eyes, then nothing will." said Martin who made a rare public appearance at a conference on the IMF's future hosted by the Centre for International Governance Innovation in Waterloo, Ont., on Saturday.

The IMF's role as a lender of last resort has diminished because countries such as Argentina and Russia have paid off their debts. That leaves the fund's staff with little leverage to convince governments to follow their policy advice. Exacerbating the fund's struggle for legitimacy is the old world order's refusal to relinquish any material control to the emerging economic powers.

Fan He, a professor at the Chinese Academy of Social Sciences, told the conference that his country's government is tiring of IMF advice that does little more than echo U.S. complaints about how the Communist regime runs the world's fastest-growing major economy. "If the fund doesn't deliver, it will be marginalized, it will disappear," he said. That, too, was the view of representatives from Latin America, Central Asia and the Middle East.