Asia seeks more say in IMF, WB<\/p>\n
Lesley Wroughton, Reuters\/Washington<\/p>\n
Fast-growing Asian nations on Saturday (Sunday in Jakarta)
\ndemanded more power in global financial institutions, but whether
\ntheir calls would be the catalyst for real change was unclear
\ndespite backing from major powers.<\/p>\n
The debate over control in the International Monetary Fund
\n(IMF) and World Bank, weighted in favor of leading industrial
\npowers, took on new momentum as U.S. Treasury Secretary John Snow
\nacknowledged the structure of the IMF should reflect the current
\nglobal economic reality.<\/p>\n
Snow and Canadian Finance Minister Ralph Goodale said an
\nincrease in quotas, contributions which in turn determine voting
\nrights, was unnecessary because the IMF was already flush with
\nfunds, with borrowers repaying debts and overall IMF lending down
\namid a healthy pace of global growth.<\/p>\n
Both ministers argued it would be better to rebalance the
\nquota system.<\/p>\n
"In our view, members need to develop a plan for voluntary
\ntransfer of quota shares from some of the most overweight to the
\nmost underweight large emerging market countries, while
\nprotecting the shares of the poorest countries," Snow said.<\/p>\n
IMF member quotas are based broadly on a country's relative
\nweight in the world economy and generate most of the IMF's
\nresources. The weight of the quota determines a member's
\nfinancial contribution to the IMF and its voting power.<\/p>\n
Any changes in quotas requires 85 percent approval.<\/p>\n
European nations were mostly silent on Saturday on the issue,
\na source of growing tension in the IMF that dominated speeches on
\nthe first day of the semi-annual meetings of the World Bank and
\nIMF.<\/p>\n
The subject got only a fleeting mention in the end-of-day
\ncommunique by the IMF's policy-setting committee.<\/p>\n
A Group of Eight (G-8) official at the meeting said there was
\nlengthy discussion about quotas, but resistance from European
\ncountries kept the language in the communique on quotas vague.<\/p>\n
Analysts and IMF officials have long argued that European
\ncountries should merge into a single chair that would raise
\nEurope's voting power and make way for developing nations.<\/p>\n
"This is a complex issue," Germany's Deputy Finance Minister
\nCaio Koch-Weser told reporters in Washington. "This can't be a
\nquestion of Europe on the one side and Asia on the other," he
\nsaid, "The picture is much more complicated."<\/p>\n
Koch-Weser said the quota adjustments would be difficult and
\nrequire lengthy discussion, adding, "It should also not be
\nconfused with ... how we coordinate policy in Europe."<\/p>\n
The IMF's major shareholders -- the United States and major
\nEuropean powers -- have long controlled decisions in the fund and
\ndetermined who leads it. Changes to the quota allocations would
\nmean they would have less sway.<\/p>\n
A senior official with the Group of 24 developing countries
\nsaid Asia was frustrated with the fact that representation in the
\ninstitutions did not adequately reflect their expanding share of
\nthe global economy.<\/p>\n
"The process is just starting but clearly no one is prepared
\nto make the first move," said the official. "The Asian economies
\nare not going to wait around for very much longer and will start
\nmoving away from the Fund."<\/p>\n
IMF officials said Asian countries, including Thailand and
\nMalaysia, were pushing for some signal from richer nations of
\nchange by the IMF fall meetings in Singapore late next year.<\/p>\n
Han Duck-soo, South Korea's minister of finance and economy,
\nsaid a fix for the problem was "long overdue."<\/p>\n
"When the fund fails to be fair in its quotas distribution, it
\nalso loses its credibility and legitimacy," Han said. "For the
\nfund to retain relevance, it must urgently address the quota
\nrepresentation issue."<\/p>\n
Thailand's Finance Minister Thanong Bidaya said if the IMF
\nwanted to retain its credibility there needed to be change.<\/p>\n
"The board of governors and management should strongly press
\nfor these changes; otherwise, how could these institutions preach
\nto member countries on governance issues," he said.<\/p>\n
In unusually candid remarks, Japan's finance minister said the
\ncurrent distribution of IMF quotas "represents another form of
\nunsustainable global imbalance."<\/p>",
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