Sunday, November 19, 2006

Further IMF Voting Reform on the Cards?

India’s finance minister says he'll push IMF reform at G20 meeting in Australia

Nick Tattersall

Associated Press

Nov 15, 2006

At the G-20 countries 2 day meeting which began this Saturday in Sydney, voting reform at the Washington based IMF is once again on the agenda. Recently in September 2006, the IMF approved a series of reforms that gave emerging countries such as China, South Korea, Turkey and Mexico greater voting rights to reflect their growing economic clout. The IMF also agreed to overhaul the general voting structure sometime within the next two years.

However, many nations are still displeased with the voting structure. A group of 22 countries led by India plan to request the IMF to increase their voting rights during this week’s meeting of finance ministers of 20 countries. Voting shares are of critical importance since it affects each countries say in the general decisions of the IMF and how much can they borrow from it. Currently, IMF voting rights are apportioned between nations based on the size of their economy, openness to trade and other criteria. India would like to see a new formula for voting rights that would use national income calculated in terms of purchasing power, and not dollars.

1. How should voting rights in multilateral institutions such as the World Bank and the International Monetary Fund be divided? What bases are fair and accurate?

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