- The Washington Times - Monday, September 18, 2006

3:19 p.m.

SINGAPORE — The 184-nation International Monetary Fund today approved reforms to increase the voice 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 U.S. and other Western powers too much influence.

The proposal won 90.6 percent of the total vote, the IMF said in a release. 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.

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 Wednesday.

When the IMF was founded in 1945, it focused on the needs of the United States, Europe and Japan. Over time, the importance of emerging economies has grown. The reforms seek to redress these changes.

“For institutions like the IMF to continue to be relevant they have to change with the economy,” U.S. Treasury Secretary Henry Paulson said before the results were announced.

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