[stop-imf] IMF board to weigh controversial voting reform plan

[robert weissman]

  http://afp.google.com/article/ALeqM5i_2l5PFdXqHMNovim2PsZ7piiiqw


  March 27, 2008


  IMF board to weigh controversial voting reform plan

7 hours ago

WASHINGTON (AFP) =97 The International Monetary Fund's executive board on
Friday will weigh a proposed voting rights reform, aimed at raising the
developing world's voice but already criticized by experts as inadequate.

The reform package is the first major test of IMF managing director
Dominique Strauss-Kahn, who took office in late September pledging to
restore legitimacy to a heavily criticized institution that is losing
relevance.

The proposals on the agenda of Friday's board meeting call for the
developed countries to give up a fraction of their voting rights --
equivalent to 1.6 percentage point -- to the benefit of the emerging and
developing countries, according to an internal document obtained by AFP.

Under the terms of the proposal, developed countries would have 57.9
percent of the voting rights, compared with the current 59.5 percent,
while the emerging and developing countries would see their share rise
to 42.1 percent, from 40.5 percent, the nearly 50-page document said.

A rebalancing of voting rights at the six-decade-old institution was
launched more than two years ago and is expected to be completed at the
IMF annual meetings on April 12-13 in Washington.

An initial reform was decided at the IMF annual meeting in September
2006, in Singapore.

The internal IMF document said that if the proposals are combined with
what was negotiated at Singapore, the total amount of voting rights
transferred to the developing and emerging countries would amount to 2.7
percentage points.

IMF economists devised a complex formula to arrive at the adjustment.

First the basic voting rights of each 185 member country are tripled, a
move that particularly benefits the poor countries, mainly in Africa.

Then a new quota formula is applied to each country, which reduces the
domination of the Group of Seven richest countries, especially the
United States and Europe.

The package includes a series of "other elements" clearly aimed at
securing the support of the most influential emerging countries, such as
China, India and Brazil, in boosting the voting rights accrued under the
new quota formula.

The reform measures, however, remain largely inadequate, experts said.

"The proposed reforms fall far short in addressing the challenges facing
the IMF in its evolution toward a truly global institution with more
balanced and inclusive representation and voting power," eight
influential experts based in Washington said in a joint letter Wednesday
to the IMF executive board.

They asked the board to reject the "inadequate" package at its meeting
Friday.

If the board approves "the proposed inadequate package of reforms, we
believe that supporters of a strong and viable IMF should recommend that
their own and other member nations vote against that reform package when
it comes to the Board of Governors later this year for formal adoption,"
the experts wrote.

The letter was signed by Colin Bradford, Ralph Bryant, Homi Kharas and
Johannes Linn of The Brookings Institution; Edwin Truman and John
Williamson of the Peterson Institute for International Economics; Nancy
Birdsall of the Center for Global Development; and Jo Marie Griesgraber
of the New Rules for Gobal Finance Coalition.

Oxfam International, the humanitarian organization, said on Thursday the
proposed reforms represent "minimal" change for the organization's
structure.

"After years of debate, a proposal that gives only a small increase in
quota share for a handful of developing countries -- and none for the
rest -- would be more than disappointing," said Oxfam International's
Elizabeth Stuart.

"This proposal must be the beginning of a longer debate that will give
poor countries a bigger say in the decision-making process," she said in
a statement.

The proposal requires approval by a majority of the board members to
become a resolution, which then would need support from 85 percent of
the 185 member nations to be adopted.