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

    Video As Refugees Perish, Greek Graveyards Fill

    Before burial at overflowing cemeteries, unidentified dead being swapped for DNA, in case some day relatives come to learn their fate

    Russian Opposition Leader Sues Putin for Conflict of Interest

    Alexei Navalny tells VOA in exclusive interview why transfer of $2 billion from country’s wealth fund to company with ties to President Putin’s son-in-law triggered lawsuit

    How Diversity Has Changed America

    Over the past four decades, the level of diversity in the United States has increased most in these four states

    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.
    As Refugees Perish, Greek Graveyards Filli
    X
    Hamada Elsaram
    February 11, 2016 8:01 PM
    Aid workers on the Greek island of Lesbos say they are struggling to bury the increasing number of bodies of refugees that have been recovered or washed up ashore in recent months.  The graveyards are all full, they say, yet as tens of thousands of people clamor to get out of Syria, it is clear refugees will still be coming in record numbers. For VOA, Hamada Elrasam reports from Lesbos, Greece.
    Video

    Video As Refugees Perish, Greek Graveyards Fill

    Aid workers on the Greek island of Lesbos say they are struggling to bury the increasing number of bodies of refugees that have been recovered or washed up ashore in recent months.  The graveyards are all full, they say, yet as tens of thousands of people clamor to get out of Syria, it is clear refugees will still be coming in record numbers. For VOA, Hamada Elrasam reports from Lesbos, Greece.
    Video

    Video To Fight Zika, Scientists Target Mosquitoes

    Mosquitoes strike again. The Zika virus outbreak is just the latest headline-grabbing epidemic carried by these biting pests, but researchers are fighting back with new ways to control them. VOA's Steve Baragona takes a look.
    Video

    Video Mosul Refugees Talk About Life Under IS

    A top U.S. intelligence official told Congress this week that a planned Iraqi-led operation to re-take the city of Mosul from Islamic State militants is unlikely to take place this year. IS took over the city in June 2014, and for the past year and a half, Mosul residents have been held captive under its rule. VOA's Zana Omar talked to some families who managed to escape. Bronwyn Benito narrates his report.
    Video

    Video Scientists Make Progress Toward Better Diabetes Treatment, Cure

    Scientists at two of the top U.S. universities say they have made significant advances in their quest to find a more efficient treatment for diabetes and eventually a cure. According to the International Diabetes Federation, the disease affects more than 370 million people worldwide. VOA’s George Putic reports.
    Video

    Video NATO to Target Migrant Smugglers

    NATO has announced plans to send warships to the Aegean Sea to target migrant smugglers in the alliance's most direct intervention so far since a wave of people began trying to reach European shores.
    Video

    Video Russia's Catholics, Orthodox Hopeful on Historic Pope-Patriarch Meeting

    Russia's Catholic minority has welcomed an historic first meeting Friday in Cuba between the Pope and the Patriarch of Russia's dominant Orthodox Church. The Orthodox Church split with Rome in 1054 and analysts say politics, both church and state, have been driving the relationship in the centuries since. VOA's Daniel Schearf reports from Moscow.
    Video

    Video Used Books Get a New Life on the Streets of Lagos

    Used booksellers are importing books from abroad and selling them on the streets of Africa's largest city. What‘s popular with readers may surprise you. Chris Stein reports from Lagos.
    Video

    Video After NH Primaries All Eyes on South Carolina

    After Tuesday's primary in New Hampshire, US presidential candidates swiftly turned to the next election coming up in South Carolina. The so-called “first-in-the-South” poll may help further narrow down the field of candidates. Zlatica Hoke reports.
    Video

    Video US Co-ed Selective Service Plan Stirs Controversy

    Young women may soon be required to register with the U.S. Selective Service System, the U.S. government agency charged with implementing a draft in a national emergency. Top Army and Marine Corps commanders told the Senate Armed Services Committee recently that women should register, and a bill has been introduced in Congress requiring eligible women to sign up for the military draft. The issue is stirring some controversy, as VOA’s Bernard Shusman reports from New York.
    Video

    Video Lessons Learned From Ebola Might Help Fight Zika

    Now that the Ebola epidemic has ended in West Africa, Zika has the world's focus. And, as Carol Pearson reports, health experts and governments are applying some of the lessons learned during the Ebola crisis in Africa to fight the Zika virus in Latin America and the Caribbean.
    Video

    Video Smartphone Helps Grow Vegetables

    One day, you may be using your smartphone to grow your vegetables. A Taipei-based company has developed a farm cube — a small, enclosed ecosystem designed to grow plants indoors. The environment inside is automatically adjusted by the cube, but it can also be controlled through an app. VOA's Deborah Block has more on the gardening system.
    Video

    Video Illinois Voters Have Mixed Emotions on Obama’s Return to Springfield

    On the ninth anniversary of the launch of his quest for national office, President Barack Obama returned to Springfield, Illinois, to speak to the Illinois General Assembly, where he once served as state senator. His visit was met with mixed emotions by those with a front-row seat on his journey to the White House. VOA's Kane Farabaugh reports.
    Video

    Video Exhibit Turns da Vinci’s Drawings Into Real Objects

    In addition to being a successful artist, Renaissance genius Leonardo da Vinci designed many practical machines, some of which are still in use today, although in different forms. But a number of his projects were never realized — until today. VOA’s George Putic reports.
    Video

    Video Heated Immigration Debate Limits Britain’s Refugee Response

    Compared to many other European states, Britain has agreed to accept a relatively small number of Syrian refugees. Just over a thousand have arrived so far -- and some are being resettled in remote corners of the country. Henry Ridgwell reports on why Britain’s response has lagged behind its neighbors.
    Video

    Video Russia's Car Sales Shrink Overall, But Luxury and Economy Models See Growth

    Car sales in Russia dropped by more than a third in 2015 because of the country's economic woes. But, at the extreme ends of the car market, luxury vehicles and some economy brands are actually experiencing growth. VOA's Daniel Schearf reports from Moscow.