Susan Tam at the International Monetary Fund/World Bank Group meetings 2006
SINGAPORE: Malaysia wants advanced economies to limit their claims for more voting rights in the International Monetary Fund (IMF) to allow for greater representation of the emerging markets.
Second Finance Minister Tan Sri Nor Mohamed Yakcop said while Malaysia supported the first stage of IMF’s reform agenda, the real test of international cooperation lay in the second stage.
“We are concerned that the ad hoc increase in stage one was limited to only four countries.
“It failed to address the significant under-representation of many other members,” he said at the start of the meetings yesterday.
On Monday night, the IMF took the first step in making reforms by increasing the voting power of China, South Korea, Mexico and Turkey.
Nor Mohamed said to meet the completion of the reform agenda deadline of 2008, there should be a firm commitment by all to speed up the implementation of the second stage.
He said Malaysia believed that variables such as the GDP, openness, variability and reserves were important indicators of a country’s influence within the global economy.
These, he said, reflected members’ ability and willingness to contribute and play a larger role within the international financial community, adding that the GDP should not be the predominant factor determining a country's voting power.
Nor Mohamed also said Malaysia supported the proposal for World Bank partner countries to engage in partnerships most beneficial to Middle Income Countries (MICs).
“It is important for the IMF and the bank to adopt an open approach in its engagement with the MICs.
“Countries should also be allowed greater flexibility in determining policy priorities and options in charting their own development paths,” he added.
Indonesian Finance Minister Sri Mulyani Indrawati said the IMF and World Bank should be more proactive when offering reforms for member countries.
“Financial assistance can make a difference, but only if it comes at the right time.
“International experience can also help but it has to be done on a member country’s schedule,” she added.
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