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The international monetary fund (IMF) is holding its annual meeting in Southeast Asia this week. Nearly 10 years have passed since the 1997 Asian crisis, so this is an anniversary of sorts?a not entirely happy one. The IMF's image in Asia suffered from perceived missteps it made during the crisis. Yet the fund also did a lot right (as was shown by the region's rapid recovery), and since the crisis the IMF has changed. More change is in the works. At the meeting in Singapore, the fund is pursuing reforms that will give greater influence to emerging economic powers in Asia and elsewhere. The IMF is also taking steps that address some of the misgivings about the way it has worked in the past to prevent and resolve financial turmoil.

Some background: one of the IMF's primary missions is to be an emergency lender to countries suffering from economic shocks, such as sudden currency devaluation. During the Asian crisis, the IMF loaned billions of dollars to countries including Thailand, Indonesia and South Korea, where years of excessive borrowing and frenzied investment by a financially overstretched private sector (abetted by errant government policies) led to sharp economic reversals. While IMF intervention helped put those countries on the road to recovery, it was not without controversy. For example, the IMF initially urged governments to cut spending, but quickly reversed itself when it saw this would further slow damaged economies. The prevailing Asian view then was that as a condition for receiving assistance, the IMF pushed Asian governments to adopt policies that furthered the interests of industrialized nations, the IMF's largest shareholders.

Determined never to be at the mercy of foreigners again, many Asian countries have since built up huge foreign-exchange reserves as a buffer against financial shocks. Emerging Asia now has currency reserves approaching $2 trillion. Self-insured against everything short of Armageddon, these nations have little incentive to engage in discussions about the international financial system. But the world needs such dialogue more than ever. There are risks to the global economy posed by mounting trade imbalances, especially the U.S.'s huge trade deficit (around 6% of GDP) and the soaring surpluses in emerging Asia, some European economies, and oil-producing nations. These imbalances cannot be mitigated by the Group of Seven (G-7) industrial countries alone. The fact is, the global economy is very different from what it was 20 years ago, when the G-7 accounted for half the world's GDP measured in purchasing-power parity. Then, large industrial economies had little need to consult the rest of the world. Today, the six largest economies outside the G-7?including Brazil, China, India and Russia?now account for 30% of global GDP. Yet China, despite its economic heft, has fewer votes at the IMF than any of the G-7 nations.

Dynamic emerging economies need a greater role in managing the global economy. The IMF has set up a mechanism, called multilateral consultations, designed to bring together groups that are economically large enough to resolve common problems while being numerically small enough to engage in candid discussion. Depending on the problem, the group will vary?for example, the first multilateral consultation brings together China, the Euro area, Japan, Saudi Arabia and the U.S. to discuss how to narrow global trade imbalances.

The IMF is also changing the way it lends. Emerging markets remain vulnerable to financial-market turbulence?we saw a mild version of this in May. Not only is it costly, however, for a country to build its foreign reserves to protect against such risks, it also hurts the global economy if the country holds down its exchange rate in order to export more to build those reserves. There needs to be an alternative, an IMF lending facility that provides assurance to countries that financing will be available if, despite sound policies, they are hit by turbulence?and that this funding will not have onerous conditions attached by the IMF, conditions that were so resented during the Asia crisis. The precise structure of such a facility is currently being debated by the fund and its members.

Finally, for the IMF to be seen by all its members as a legitimate place for multilateral dialogue, and for them to trust the fund as a lender, members must feel adequately represented. A central focus of reform today is the restructuring of voting power to better reflect changes in economic importance, as well as to give small poor countries more of a say. This is no easy task. A gain for some will mean a loss for others. But if reforms enacted in Singapore bolster confidence in the IMF, everybody wins?and future anniversaries should be happy affairs.

• By Raghuram Rajan
• Asia's dynamism has reshaped the global economic landscape, and the IMF is trying to adapt