IMF board to consider voting reforms
28 Mar 2008
Mumbai: The International Monetary Fund's executive board will recommend an overhaul of the voting power of member countries, aimed at raising the developing world's voice, which many say is inadequate.
The reform package, the first major after Dominique Strauss-Kahn took over as IMF managing director in late September, has won the support of key emerging economies like China, India, South Korea, Mexico and Brazil, which will gain voting power according to a new formula for calculating each country's so-called quotas, or membership subscriptions.
Countries like Egypt, Iran, Saudi Arabia and Russia were expected to abstain from Friday's vote because the changes reduce their votes, while smaller European nations such as Luxembourg gain.
The proposals call for the developed countries to give up a fraction of their voting rights - equivalent to 1.6 percentage point - to the benefit of the emerging and developing countries.
Developed countries would have 57.9 per cent of the voting rights, compared with the current 59.5 per cent, while the emerging and developing countries would see their share rise to 42.1 per cent, from 40.5 per cent, the document said.
A review of IMF voting rights was launched more than two years ago and is expected to be completed at its meetings on April 12-13.
IMF economists devised a complex formula to apply the new quota formula to each country, which reduces the domination of the group of seven richest countries, especially the United States and Europe.
The package has also some "other elements" aimed at securing the support of the most influential emerging countries, such as China, India and Brazil, in boosting the voting rights accrued under the new formula.
