The head of the International Monetary Fund, Rodrigo de Rato, Tuesday applauded the decision to boost the voting power within the IMF of four developing countries - China, South Korea, Turkey and Mexico.
De Rato told a Washington audience that the quota increases for the four countries are only a first step. Following the organization's annual meeting in Singapore Sept. 18-20, he will propose more reaching changes that will boost the voting shares of other developing economies. De Rato, a former Spanish finance minister, said the reconfiguration of votes is overdue.
"They [the changes] are based on fairness," he said. "And their impact will be large. They will allow the Fund to remain an effective and credible participant in global economic discussions. They underpin all the other elements of the Fund reforms."
IMF voting power is apportioned to members based on economic strength. Even with the changes for the four countries, the 184 member financial cooperative will remain firmly under the control of the major industrial democracies.
Collectively the United States, Canada, Japan and Europe account for 63 percent of the weighted votes within the IMF and the United States alone controls 17 percent. The IMF is owned by its members and was set up during the Second World War to deal with financial emergencies. Most recently in the late 1990s, the IMF is credited with playing a constructive role in rescuing several East Asian economies from financial distress.
Under the reconfiguration approved last week by the Fund's 24-member executive board, China will now account for over two and a half percent of all votes. China has over the past decade been the world's growing economy as its economic strength has doubled and 300 million people have advanced out of poverty.
The promised future reapportionment of shares is bound to be contentious. Europe and the United States appear unwilling to significantly yield their own share of the votes while Africa has already been assured that its already small say in decisions will not be further diminished.