IMF moves toward new power reform

WASHINGTON, Thursday

The International Monetary Fund’s executive board has moved toward a fundamental restructuring of voting rights.

The shift will give more clout to emerging economies like China and Brazil, a source close to the board told AFP.

The board agreed on Wednesday on the outlines of a new structure for setting voting power and contributions in the Washington-based lender that will recognise the rise of the emerging economies in the global economy, the source said.

The reform still has to be defined precisely and put down on paper, but the scope of accord on the restructuring — which would likely diminish Europe’s powerful role at the Fund — suggests the details could be sorted out quickly.

A Fund spokesman contacted by AFP confirmed that the board discussed the issue, but declined to comment on any details of the talks.

According to the source, the reform proposal advanced by Brazil’s IMF director Paulo Nogueira Batista was received favorably by the most important directors on the board.

Crisis intervention

The proposed reform comes as the IMF is seeking to boost its resources for crisis intervention by some $500 billion.

While Europe will be a major part of this, the lion’s share is expected to come from the cash-rich emerging economies — Brazil, China, India, Russia, South Africa, known as the Brics, and others.

(AFP)