SINGAPORE (AP) — The 184-nation International Monetary Fund yesterday approved reforms to increase the voices of emerging economies China, South Korea, Turkey and Mexico to reflect their growing economic sway.
The move, which raises the voting share of those four nations, aims to boost the credibility of the IMF, which six decades after its founding is facing criticism for giving the United States and other Western powers too much influence.
The proposal won 90.6 percent of the total vote, the IMF said. It needed 85 percent to pass.
Voting shares affect member countries’ say in the decisions of the Washington-based institution and how much they can borrow from it. The IMF works to promote global economic stability and provide emergency loans to members in crisis — akin to a financial firefighter.
In a second step, the IMF will overhaul the voting structure of all member nations within two years to give developing nations a greater voice.
“These governance reforms are tremendously important for the future of our institution. They will enhance our effectiveness and add legitimacy to all of the other reforms we are implementing,” IMF Managing Director Rodrigo de Rato said in a statement prepared for delivery to delegates today.
The reform measure was the most important agenda item on IMF’s annual meeting, held in Singapore along with its sister institution, the World Bank, which lends money to countries to fight poverty. The meetings wind up tomorrow.
The World Bank’s policy-planning committee, meanwhile, endorsed a broad strategy for tackling corruption yesterday that gave the 24-member executive board oversight to ensure that the institution’s decisions are broadly based.
The move came after the bank’s president, Paul Wolfowitz, had blocked more than $1 billion for projects in Africa and Asia because of charges of corruption. That decision was criticized by many countries — both donors and recipients — that say it penalized poor people for the abuses of their governments.
According to the World Bank, $1 trillion in bribes change hands worldwide every year. The bank said it has uncovered 2,000 cases of reputed fraud, corruption and other misconduct related to its projects since 1999 and has sanctioned more than 330 companies and people, it says.