A DEAL by the International Monetary Fund (IMF) to increase the voting power and influence of developing countries is said to be almost in the bag, despite continuing stiff opposition from some of the Funds 184 members.
The proposal will increase the votes of countries such as China, South Korea, Mexico and Turkey.
But it also commits the Fund to a broader review of how it allocates voting power in future.
The reforms are part of IMFs plan to regain its credibility in the developing world, where it has been criticised for being overly influenced by the developed nations.
These are the focus of the annual meetings in Singapore and have been described as the most significant change in the Funds governance in the last 15 to 20 years.
Argentinian Minister of Economy and Production Felisa Miceli told reporters yesterday that although IMF members have up to tomorrow to vote on the package of reforms, 85% of the votes has been obtained.
Since 85% is the magic number the IMF needs for major reforms to be approved, the changes are expected to be adopted tomorrow when the IMFs board of governors meet.
IMF members are given voting rights, called quotas, based on the size of their economies and reserves, as well as their openness to trade and capital flows.
But while some developing economies, especially in Asia, have grown rapidly over the last few years, the Funds voting structure has not reflected this. The United States has effective veto power with 17% of the votes.
Despite the apparent show of support, the proposed changes have been controversial.
European finance officials on Saturday continued to oppose the US proposal that votes should be computed according to GDP, saying that the US would have the advantage.
The Group of 24 developing countries from Africa, Latin America and Asia seemed divided on how they voted for the reforms.
Argentina, Brazil, India and Egypt issued a joint statement yesterday saying that they opposed the reforms. They said the second stage of adjustments might not happen. The Straits Times/ Asia News Network
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