News / Africa

    International Monetary Fund Debates Internal Reforms, Global Economic Growth

    Financial ministers and development activists are in Washington this week for the annual meetings of the International Monetary Fund and the World Bank. Among the topics of discussion are economic growth and the representation of developing countries on the IMF’s decision-making body, the executive board.

    William Eagle

    The 24-member board of the IMF approves billions of dollars in loans for countries hit by the global financial crisis.

    A third of its seats are held by European countries, including small ones like Belgium and the Netherlands.

    But that’s expected to end.

    The IMF is committed to broadening the influence of the developing countries on the board, with Europe under pressure to give some of its seats to other countries.

    Soren Ambrose is the development finance coordinator for ActionAid International.

    International Monetary Fund Debates Internal Reforms, Global Economic Growth
    International Monetary Fund Debates Internal Reforms, Global Economic Growth

    He says originally, the executive board had only 20 members, and an agreement to keep the number at 24 has to be renewed every two years.  The US says it will not agree to a renewal unless the Europeans agree to change their representation on the board.

    If a decision is not made by the end of October, the board could become smaller.

    "If no action is taken," he says, "we would lose four seats on the board automatically, the four smallest in terms of voting power– India, Brazil and Argentina.  [They’re] all members of the G20, who have reasons to say they are important and need representation on the board.

    "The fourth on the board belongs to 23 sub-Saharan African countries, and it would be unwise for the IMF to exclude African countries which have been taking out loans most consistently for last 30 years."

    Reforms would likely favor middle-income countries like Turkey and the Philippines and not the poorest of the poor. That’s because, he says, votes on the IMF board are apportioned according to a country’s “relative weight” in the global economy.   In his view, the least developed countries of the world have a meager voice on the board and could even have that diluted by future reforms.  Middle income countries currently on the 24-member board include Thailand, Egypt, Iran and India.

    Members of the media ask questions to International Monetary Fund's Managing Director Dominique Strauss-Kahn.
    Members of the media ask questions to International Monetary Fund's Managing Director Dominique Strauss-Kahn.

    He says ActionAid would rather see voting weight based on a country’s population and on the support they’ve provided the IMF through repayments of loans.

    "The reason we say [a revised board should]  take loans into account," he says, "is that for many years, the IMF survived on the  repayments being made by (developing) countries taking out loans. So if they were to get credit for all they’ve paid in like interest payments and so on,  that would increase their voice."

    Also up for discussion are improvements in loans to the developing countries and the anticipated introduction of what’s being called a Global Stabilization Mechanism, which would make large amounts of money available on short notice to a number of countries at once in the case of a pending global economic collapse.

    "It would be collective action backed by the board of the IMF," says Ambrose, "and, by doing many countries at once, try to restore confidence in the entire system. It means the IMF is not trying to [publicly] identify a country’s weaknesses, acting like a credit rating agency, but instead be a more systemic fixer of the entire global economy."

    Participants are also expected to discuss ways of boosting growth.

    Some countries are trying to boost growth by devaluing their currency, thus making their exports cheaper.  IMF Managing Director Dominique Strauss-Kahn warns that a race to lower exchange rates could destabilize the world economy.

    International Monetary Fund's Managing Director Dominique Strauss-Kahn warns against a race to devalue currencies
    International Monetary Fund's Managing Director Dominique Strauss-Kahn warns against a race to devalue currencies

    Participants will also discuss whether the international community should boost economic growth by continuing to spend tax payer funds to stimulate their economies and provide jobs, or whether they should promote private sector growth by cutting spending and paying off debt.

    Ambrose says the decision will ultimately affect developing countries.

    "They rely on demand coming from the richer countries for the products they export," he explains.

    "If the [industrialized] economies are slowing down and there’s not as many people working and consuming, then they are not buying [from poorer countries] coffee, or the cotton for their clothing, and the prices for thea commodities go down. That’s what affects Africa, Latin America and Asia."

    New ideas could emerge through some of the week’s lectures and panel discussions.  Among them are ways to jump-start job creation and a look at some of the challenges facing emerging market economies.

    Ambrose says it’s not clear if any consensus will emerge from the meetings.  If not, he says, the debate on many of the issues, including reforms of the IMF governance board, will continue in November at the meeting of G20 in Seoul, South Korea.

    You May Like

    Who Are US Allies in Fight Against Islamic State?

    There is little but opportunism keeping coalition together analysts warn — SDFs Arab militias are not united even among themselves, frequently squabble and don’t share Kurds' vision for post-Assad Syria

    Video For Many US Veterans, the Vietnam War Continues

    More than 40 years after it ended, war in Vietnam and America’s role in it continue to provoke bitter debate, especially among those who fought in it

    Family's Fight Pays Off With Arlington Cemetery Burial Rights for WASPs

    Policy that allowed the Women Airforce Service Pilots veterans to receive burial rites at Arlington had been revoked in 2015

    This forum has been closed.
    Comments
         
    There are no comments in this forum. Be first and add one

    By the Numbers

    Featured Videos

    Your JavaScript is turned off or you have an old version of Adobe's Flash Player. Get the latest Flash player.
    Vietnamese-American Youth Optimistic About Obama's Visit to Vietnami
    X
    Elizabeth Lee
    May 22, 2016 6:04 AM
    U.S. President Barack Obama's visit to Vietnam later this month comes at a time when Vietnam is seeking stronger ties with the United States. Many Vietnamese Americans, especially the younger generation, are optimistic Obama’s trip will help further reconciliation between the two former foes. Elizabeth Lee has more from the community called "Little Saigon" located south of Los Angeles.
    Video

    Video Vietnamese-American Youth Optimistic About Obama's Visit to Vietnam

    U.S. President Barack Obama's visit to Vietnam later this month comes at a time when Vietnam is seeking stronger ties with the United States. Many Vietnamese Americans, especially the younger generation, are optimistic Obama’s trip will help further reconciliation between the two former foes. Elizabeth Lee has more from the community called "Little Saigon" located south of Los Angeles.
    Video

    Video First-generation, Afghan-American Student Sets Sights on Basketball Glory

    Their parents are immigrants to the United States. They are kids who live between two worlds -- their parents' homeland and the U.S. For many of them, they feel most "American" at school. It can be tricky balancing both worlds. In this report, produced by Beth Mendelson, Arash Arabasadi tells us about one Afghan-American student who seems to be coping -- one shot at a time.
    Video

    Video Newest US Citizens, Writing the Next Great Chapter

    While universities across the United States honor their newest graduates this Friday, many immigrants in downtown Manhattan are celebrating, too. One hundred of them, representing 31 countries across four continents, graduated as U.S. citizens, joining the ranks of 680,000 others every year in New York and cities around the country.
    Video

    Video Vietnam Sees Strong Economic Growth Despite Incomplete Reforms

    Vietnam has transformed its communist economy to become one of the world's fastest-growing nations. While the reforms are incomplete, multinational corporations see a profitable future in Vietnam and have made major investments -- as VOA's Jim Randle reports.
    Video

    Video Qatar Denies World Cup Corruption

    The head of Qatar’s organizing committee for the 2022 World Cup insists his country's bid to host the soccer tournament was completely clean, despite the corruption scandals that have rocked the sport’s governing body, FIFA. Hassan Al-Thawadi also said new laws would offer protection to migrants working on World Cup construction projects. VOA's Henry Ridgwell reports.
    Video

    Video Infrastructure Funding Puts Cambodia on Front Line of International Politics

    When leaders of the world’s seven most developed economies meet in Japan next week, demands for infrastructure investment world wide will be high on the agenda. Japanese Prime Minister Shinzo Abe’s push for “quality infrastructure investment” throughout Asia has been widely viewed as a counter to the rise of Chinese investment flooding into region.
    Video

    Video Democrats Fear Party Unity a Casualty in Clinton-Sanders Battle

    Democratic presidential front-runner Hillary Clinton claimed a narrow victory in Tuesday's Kentucky primary even as rival Bernie Sanders won in Oregon. Tensions between the two campaigns are rising, prompting fears that the party will have a difficult time unifying to face the presumptive Republican nominee, Donald Trump. VOA national correspondent Jim Malone has more from Washington.
    Video

    Video Portrait of a Transgender Marriage: Husband and Wife Navigate New Roles

    As controversy continues in North Carolina over the use of public bathrooms by transgender individuals, personal struggles with gender identity that were once secret are now coming to light. VOA’s Tina Trinh explored the ramifications for one couple as part of trans.formation, a series of stories on transgender issues.
    Video

    Video Amerikan Hero Flips Stereotype of Middle Eastern Character

    An Iranian American comedian is hoping to connect with American audiences through a film that inverts some of Hollywood's stereotypes about Middle Eastern characters. Sama Dizayee reports.
    Video

    Video Budding Young Inventors Tackle City's Problems with 3-D Printing

    Every city has problems, and local officials and politicians are often frustrated by their inability to solve them. But surprising solutions can come from unexpected places. Students in Baltimore. Maryland, took up the challenge to solve problems they identified in their city, and came up with projects and products to make a difference. VOA's June Soh has more on a digital fabrication competition primarily focused on 3-D design and printing. Carol Pearson narrates.

    Special Report

    Adrift The Invisible African Diaspora