Asian significance of IMF meeting
By Eric Teo Chu Cheow (China Daily)
Updated: 2006-09-22 14:14
The author is a council member of the Singapore Institute for International
Affairs
The 61st session of the International Monetary Fund (IMF)/World Bank was held
in Singapore on September 19-20, and carried great significance for the
international financial system and the Asian region.
The focus of the media has been on the much-awaited and crucial reforms of
the IMF, which were approved by 90.6 per cent of the world's finance ministers.
China, the Republic of Korea (ROK), Mexico and Turkey had their voting rights or
quotas raised with immediate effect to reflect their increasing importance in
the world economy.
As a second stage of the reforms package, the IMF will begin work on
overhauling the calculation of quotas via a "simpler and more transparent
formula," to better reflect the relative weight of the world's economies. The
governors have asked that work on this formula be completed within a year and
that further adjustments be implemented within two years.
A decision was also made to "at least double" the basic votes of all
countries, regardless of the size of their economies; this should preserve the
voting power of the poorest developing countries within the IMF, which are also
the principal borrowers from the fund.
These reforms would undoubtedly help counter the grousing of certain
developing countries that the voting rights and quotas were "skewed" in favour
of developed countries, notably the European economies. Before the increases
made in Singapore, the quotas were also reflective of the past rapport des
forces of the world's economies, without taking into the account the recent rise
of certain developing economies, like China, the ROK and India.
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