Slight shift at IMF

Posted in Business + Economy, Egyptian Affairs, Politics + Diplomacy by expresscheckout on 29 March, 2008

IMF backs shift in voting power
BBC News
March 28, 2008

The International Monetary Fund (IMF) has backed plans to redistribute voting power in the organisation.

It has recommended changes which would base the power of each of the IMF’s 185 member countries on the size of their economy, reserves and trade. The US has expressed reservations about the move but said that it would support it because it represented progress. However poorer nations and charities have said the plans, which must still be ratified, do not go far enough.

IMF members have spent more than a year negotiating the changes – which would move some sway away from traditional industrial powers including the US, the UK and Germany – to the faster-growing emerging and developing economies. China, India, South Korea, Mexico and Brazil are among those that will see their voting power increase. However, under the proposal the likes of Saudi Arabia, Egypt, Russia, Iran and Argentina would lose influence and all five countries either voted against the plans or abstained from voting.

Final decisions will be made after the IMF’s spring meeting next month. “Today’s agreement is a major step forward in the modernisation of the Fund and our efforts to adjust its structures to the dynamic and changing realities of the global economy, but it is only a first step,” said IMF Managing Director Dominique Strauss-Kahn. “We are creating a more flexible system for quota and voice, which involves further changes over time as the relative positions of countries in the world economy evolve.”

The IMF said the proposed reforms feature simpler and more transparent formulae and some ad hoc quota increases to better represent more dynamic economies. India’s executive director to the IMF, Adarsh Kishore, said the move fell short of what it “had expected, hoped for and strived for”.

See also: International Monetary Fund


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