- The Washington Times - Sunday, September 17, 2006

SINGAPORE (AP) — IMF chief Rodrigo de Rato said yesterday he saw “broad consensus” that the 184-member body would approve a reform plan to boost the voting shares of China and three other emerging economies, despite opposition from several countries.

The International Monetary Fund’s members are voting on the proposal to boost the voices of China, South Korea, Turkey and Mexico as the first part of a two-step reform plan to reflect those nations’ growing share in the global economy.

Later, the IMF plans to rework the quota formula for all members.

“I am very encouraged by what I have heard in the committee,” Mr. de Rato said after winding up a one-day meeting of the IMF’s policy-planning committee. “I see there is a broad consensus to move forward with the quota reform.”

Mr. de Rato said the move to boost China’s voting share was not aimed at putting more pressure on Beijing to make its exchange rate more flexible, but simply a recognition of its growing economic power.

“The international community recognizes that China has increased its role in the world economy,” Mr. de Rato told reporters. “I don’t think … a bigger role in the institution makes you subject to more pressures.”

The Group of Seven industrialized nations, particularly the U.S., has urged China to ease control of its currency, the yuan, as a way to rein in its ballooning trade surplus.

But China’s central bank governor, Zhou Xiaochuan, said he did not feel any pressure on the issue during a meeting Saturday with G-7 finance ministers and central bankers. He repeated Beijing’s pledge to ease its restrictions on the yuan’s exchange rate.

Mr. de Rato, however, acknowledged that more power often brings more responsibility.

A bigger voice at IMF “would allow you to express your views but, of course, you will listen to the views of others,” he said.

Although nearly all IMF members see a need for reform, several major developing countries — particularly India, Brazil and Argentina — say they are against the two-part plan for various reasons.

Argentina and Brazil want to see their voting share increased quickly. India thinks the fund should overhaul the quota calculation system once, not in the proposed two steps.

These nations also are doubtful that wealthy member nations are willing to see their voting shares reduced at a later stage.

Asked about this opposition, Mr. de Rato acknowledged that there are concerns among some countries regarding details of future reform, but stressed that there is broad support for boosting the voices of underrepresented economies.

He said the new formula would take into account “the economic weight of individual countries and the need to protect the voice of low-income countries. Personally, I don’t think there is any alternative to that.”

The reform issue is the most pressing one facing the IMF during its annual meetings with the World Bank, which culminate tomorrow and Wednesday.

The proposal needs to win 85 percent of IMF members’ votes to pass. The vote deadline is this afternoon.

LOAD COMMENTS ()

 

Click to Read More

Click to Hide