By DPA,
Washington : A long-awaited reform of the voting procedures of the International Monetary Fund (IMF) that gives developing countries a modest increase in influence was formally adopted Tuesday, said Dominique Strauss-Kahn, the organisation’s managing director.
The IMF Board of Governors adopted by a more than 90 percent vote far-reaching reforms of the institution’s governance. The move shifts voting rights by 2.7 percent away from advanced economies and in favour of developing countries.
“This vote shows the overwhelming level of support across the Fund’s membership for these reforms,” said IMF Managing Director Dominique Strauss-Kahn. “I see this result as the beginning of the new legitimacy of the Fund.”
Approval of the resolution required 85 percent of the total voting power. Strauss-Kahn noted that 94.6 percent of the members had approved the reforms, and that their vote represented 93 percent of the weighted voting shares distributed among the members.
Developing countries have long argued for a greater voice in the IMF and its sister-lender the World Bank. Some countries have resorted to bilateral and regional lending initiatives in protest against their lack of influence.
Earlier this month, Italy’s finance minister Tommaso Padoa- Schioppa, in backing the reform, said it was “no accident” that the voting reforms came on the back of a global economic downturn. The Italian minister said the inter-connectedness of the financial crisis and wider slowdown has shown the need for strong international institutions to respond.
The voting reforms still leave industrial nations with greater influence over the body’s decisions, by about 57-43 percent.
In a statement, Strauss-Kahn called the move an “important step toward a redistribution of voting shares toward dynamic emerging market and developing countries and we expect to see a continued shift over the next decade”.
In addition to changes in the quota structure, the reform package, backed by world finance ministers during the spring meetings of the IMF and World Bank earlier this month, will increase the voting shares of more than two-thirds of the 185 member countries.
It will also triple the number of basic votes, the first such increase since the fund’s creation in 1944, enabling each of the two executive directors representing African constituencies to appoint an additional alternate director.
“In particular, the tripling of basic votes reflects an innovative part of this reform effort, aimed at enhancing engagement and voice of our low-income members,” Strauss-Kahn said. “To preserve this element of the reforms, the package includes a mechanism that will keep constant the ratio of basic votes to total voting power in the IMF.”