By Steve Schifferes
Economics reporter, BBC News, Washington
US Treasury secretary Paulson was criticised by Brazil's Mantega
The International Monetary Fund (IMF) is supposed to be the financial institution that supervises the world economy.
Largely controlled by the US and Europe, it has given advice and funding to developing countries who got into economic difficulties.
But now the shoe is on the other foot, with a worldwide credit crunch that is roiling financial markets in the US and Europe while the emerging economies like China and India appear to have escaped unscathed.
As the world's bankers and financiers met at the annual World Bank and IMF meeting, almost every issue debated involved the growing power and influence of emerging economies.
Indeed, economic growth next year will probably be driven far more by China than by the United States, which is not only the world's largest economy but also one that is expected to slow down sharply as the credit crunch hits the housing market.
"We need to continue to be vigilant because all of our capital markets are not functioning normally," said US Treasury secretary Henry Paulson
Finance ministers in emerging countries pointed out the irony of the situation.
"Countries that were references of good governance, of standards and codes for the financial system, these are the very countries that are facing serious problems of financial fragility, putting at risk the prosperity of the world economy," said Brazilian finance minister Guido Mantega.
Some even asked why the IMF had not warned the US earlier of the risk it was running by allowing unregulated mortgage lending. Others asked when the Fund was going to take action to close USA's huge trade deficit by slowing spending and raising interest rates.
But in fact, the IMF's hands are tied. It simply cannot enforce its will against the US, its largest shareholder which still has a veto over its actions.
Nor is there much the IMF can do to force China to devalue its currency faster, despite its new role as monitor of "global economic imbalances", code for China's huge and growing trade surplus which now stands at $1.5 trillion and is set to rise by $400bn next year.
Allowing the yuan's value to rise would benefit China, the IMF insists.
The US Treasury, the G7 group of industrial nations, and the IMF have all argued that if China allowed its currency to float freely, and presumably rise sharply, it would improve both China's economy and help the rest of the world.
"A more flexible exchange rate would give monetary policy more scope to focus on domestic objectives, particularly the need to slow lending and investment growth," the IMF said in a recent report.
But the Chinese disagree, fearing that a sharp revaluation would hurt exports and jobs.
As former US Treasury Secretary Larry Summers told a meeting at the Institute of International Economics, it is hard to lecture your Chinese counterpart on economic management when his economy is growing at 11% a year, while yours is only growing at 3%.
The West's other complaint, that China is violating the rules of the IMF, can seem like hypocrisy since Western countries have often ignored IMF criticisms, Mr Summers added.
Sovereign wealth funds
Another topic concern about the world's economic decision makers is the role of sovereign wealth funds.
These are investments funds are created by governments to invest overseas, and both Singapore, Norway and Middle Eastern oil countries have been running such funds for a long time.
Now China has said that at least $200bn of its surplus will be invested in companies around the world, and this has sparked political controversy in both the US and Europe.
To the Chinese, the sudden desire of Western countries to regulate and restrict their investments also smacks of hypocrisy, as in the past they have had no compunction about forcing poor countries to accept Western investment as the price of aid.
The issue will continue to be controversial, as countries decide which assets are too strategic to be sold to the Chinese.
Governing the IMF
The IMF has been attempting to recognise the rising economic power of India and China by giving them more voting power in the organisation.
Africa's poor should have a greater voice, say IMF's critics
"The reform should aim at significantly raising the overall quota shares of developing countries, particularly emerging market economies, and strengthening the voice of the low income countries in the Fund," according to Li Yong, China's vice finance minister.
But further reform has stalled because it would involve smaller European countries giving up their seats on the IMF board.
And the governing structure, based on the size of each country's economy, still gives little voice to poor countries, notably in sub-Saharan Africa.
Meanwhile, the new emerging giants are voting with their feet. By building up giant trade reserves, they say they have no need to ask the IMF for funds in a crisis.
And without such lending, the IMF increasingly looks like an organisation in search of a role.