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 Positive Messaging Helps Revamp Ethiopia's Image

In country once connected with war, poverty, famine, headlines now focus on fast-growing economy, diplomatic reputation More

Russian Activist Thinks Kremlin Ordered Nemtsov's Death

Alexei Navalny says comments of Russian liberals who think government wasn't involved are 'nonsense.' More

Video Land Disputes Rise Amid Uganda Oil Boom

Investors appear to be cashing in by selling parcels of land to multiple buyers More

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

Featured Videos

Your JavaScript is turned off or you have an old version of Adobe's Flash Player. Get the latest Flash player.
Positive Messaging Transforms Ethiopia's Imagei
X
Marthe van der Wolf
March 03, 2015 9:03 PM
Ethiopia was once known for famine and droughts. Now, headlines more often point to its fast-growing economy and its emergence as a regional peacemaker. How has Addis Ababa changed the narrative? VOA's Marthe van der Wolf reports.
Video

Video Positive Messaging Transforms Ethiopia's Image

Ethiopia was once known for famine and droughts. Now, headlines more often point to its fast-growing economy and its emergence as a regional peacemaker. How has Addis Ababa changed the narrative? VOA's Marthe van der Wolf reports.
Video

Video Cyber War Rages Between Iran, US

A newly published report indicates Iran and the United States have increased their cyber attacks on each other, even as their top diplomats are working toward an agreement to guarantee Iran does not develop a nuclear weapon and to free Iran from international sanctions. The development is part of a growing global trend. VOA’s Al Pessin reports from London.
Video

Video Answers Elude Families of MH370 Passengers

For the families on board Malaysia Airlines flight MH370, an airline official’s statement nearly one year ago that the plane had lost contact with air traffic control at 2:40 AM is the only thing that remains confirmed. William Ide reports.
Video

Video Land Disputes Arise Amid Uganda Oil Boom

Ugandan police say there has been a sharp increase in land disputes, with 10 new cases being reported each day. The claims come amid an oil boom as investors appear to be cashing in by selling parcels of land to multiple buyers. Meanwhile, the people who have been living on the land for decades are chased away, sometimes with a heavy hand. VOA's Serginho Roosblad reports.
Video

Video In Russia, Many Doubt Opposition Leader's Killer Will Be Found

The funeral has been held in Moscow for Boris Nemtsov, the opposition leader who was assassinated late Friday just meters from the Kremlin. Nemtsov joins a growing list of outspoken critics of Russia under the leadership of President Vladimir Putin who are believed to have been murdered for their work. VOA’s Daniel Schearf reports from Moscow.
Video

Video Simulated Astronauts Get Taste of Mars, in Hawaii

For generations, people have dreamed of traveling to Mars to explore Earth's closest planetary neighbor. VOA's Mike O'Sullivan reports that while space agencies like NASA are planning manned missions to the planet, some volunteers in Hawaii are learning how humans will cope with months in isolation on a Mars base.
Video

Video Destruction of Iraq Artifacts Shocks Archaeologists

The city of Mosul was once one of the most culturally rich and religiously diverse cities in Iraq. That tradition is under attack by members of the Islamic State who have made Mosul their capital city. The Mosul Museum is the latest target of the group’s campaign of terror and destruction, and is of grave concern to archaeologists around the world. VOA’s Kane Farabaugh reports.
Video

Video Smartphones May Help in Diagnosing HIV

Diagnosing infections such as HIV requires expensive clinical tests, making the procedure too costly for many poor patients or those living in remote areas. But a new technology called lab-on-a-chip may make the tests more accessible to many. VOA’s George Putic reports.
Video

Video Afghan Refugees Complain of Harassment in Pakistan

Afghan officials have expressed concern over reports of a crackdown on Afghan refugees in Pakistan following the Peshawar school attack in December. Reports of mass arrests and police harassment coupled with fear of an uncertain future are making life difficult for a population that fled its homeland to escape war. VOA’s Ayesha Tanzeem reports from Islamabad.
Video

Video Ukrainian Volunteers Prepare to Defend Mariupol

Despite the ongoing ceasefire in Ukraine, soldiers in the city of Mariupol fear that pro-Russian separatists may be getting ready to attack. The separatists must take or encircle the city if they wish to gain land access to Crimea, which was annexed by Russia early last year. But Ukrainian forces, many of them volunteers, say they are determined to defend it. Patrick Wells reports from Mariupol.
Video

Video Moscow Restaurants Suffer in Bad Economy, Look for Opportunity

As low oil prices and Western sanctions force Russia's economy into recession, thousands of Moscow restaurants are expected to close their doors. Restaurant owners face rents tied to foreign currency, while rising food prices mean Russians are spending less when they dine out. One entrepreneur in Moscow has started a dinner kit delivery service for those who want to cook at home to save money but not skimp on quality. VOA's Daniel Schearf reports.
Video

Video Presidential Hopefuls Battle for Conservative Hearts and Minds

One after another, presumptive Republican presidential contenders auditioned for conservative support this week at the Conservative Political Action Conference held outside Washington. The rhetoric was tough as a large field of potential candidates tried to woo conservative support with red-meat attacks on President Barack Obama and Democrats in Congress. VOA Political Columnist Jim Malone takes a look.
Video

Video Southern US Cities Preserve Civil Rights Heritage to Boost Tourism

There has been a surge of interest in the American civil rights movement of the 1950s and '60s, thanks in part to the Hollywood motion picture "Selma." Five decades later, communities in the South are embracing the dark chapters of their past with hopes of luring tourism dollars. VOA's Chris Simkins reports.
Video

Video Deep Under Antarctic Ice Sheet, Life!

With the end of summer in the Southern hemisphere, the Antarctic research season is over. Scientists from Northern Illinois University are back in their laboratory after a 3-month expedition on the Ross Ice Shelf, the world’s largest floating ice sheet. As VOA’s Rosanne Skirble reports, they hope to find clues to explain the dynamics of the rapidly melting ice and its impact on sea level rise.

All About America

Circumventing Censorship

An Internet Primer for Healthy Web Habits

As surveillance and censoring technologies advance, so, too, do new tools for your computer or mobile device that help protect your privacy and break through Internet censorship.
More