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G20 Summit begins:
Leaders endorse IMF reforms
S KOREA: G20 leaders Friday gave their backing to sweeping
reforms designed to give emerging economies such as China a bigger say
in the International Monetary Fund.
The leaders of advanced and emerging economies announced they were
delivering “a modernised IMF that better reflects the changes in the
world economy through greater representation of dynamic emerging markets
and developing countries”.
The reforms would enhance its “legitimacy, credibility and
effectiveness, making it an even stronger institution for promoting
global financial stability and growth”, the G20 leaders said in a summit
declaration in Seoul.
The IMF’s executive board had agreed the changes described as
“historic” by Managing Director Dominique Strauss-Kahn at its own
meeting last week.
They create “the biggest-ever shift of influence in favour of
emerging market and developing countries”, Strauss-Kahn said then.
The fund, formed after World War II to remake the world financial
system and prevent a 1930s-style Depression, has long been dominated by
Western powers but has faced growing calls to adapt.
The deal to reform its 24-member board of governors was thrashed out
by G20 ministers last month ahead of this week’s summit. Europe has
agreed to give up two seats. Just over five percent of voting rights
will be transferred, and Brazil, Russia, India and China will all be
among the top 10 IMF shareholders. China will move up to the
third-largest shareholder, from sixth place.
The total size of the quotas the contributions of the 187 member
states to the fund’s capital will be doubled, to 756 billion dollars.
Upon his arrival at the IMF in 2007, Strauss-Kahn made quota
redistribution a top priority, to resolve a long and bitter battles by
emerging-market and developing countries to wrest greater power.
When a previous quota reform plan was officially adopted by member
states in April 2008, Strauss-Kahn hailed it as “the beginning of the
new legitimacy of the Fund.”
But that reform has not been enacted due to the lack of a sufficient
number of ratifications by member states. SEOUL, Friday, AFP |
