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Cameroon: IMF Recognises Weight of Emerging Economies
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Cameroon Tribune (Yaoundé)
6 May 2008
Posted to the web 6 May 2008
Lukong Pius Nyuylime
March 28 to April 28. Basically one month to reshape issues at the International Monetary Fund. It all had to do with economic justice following the new global economic mapping. New markets have emerged and new economic powers are fast engraving their influence on the world economy. We are talking here about countries hitherto considered less developed but which through their action, no longer deserve to be called as such. Top among them are Asian and Latin American countries with China, India and Brazil taking the giant leap.
In spite of the significant progress, these countries continued to have little say in the IMF. Their quota and voting share was to say the least, dissatisfying. Against this backdrop and based on the empirical economic evidence of the emerging markets, the Executive Board of the IMF, on March 28, recommended an overhaul of the institution's governance structure that will realign quota and voting shares of member countries with their relative weight and role in the global economy, and thus enhance the participation and voice of emerging market and low-income countries in the 185-member body. The Executive Board also recommended that the Fund's Board of Governors approve the reform package under voting procedures scheduled to be concluded by April 28, 2008.
And effectively, on April 28, the Board of Governors of the International Monetary Fund (IMF) adopted by a large margin far-reaching reforms of the institution's governance. Governors from 180 of the 185 member countries cast their votes. Of these, 175 countries representing 92.93 percent of the total voting power in the Fund voted in favor of the changes.
New Dispensation
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The proposed reforms include a simpler and more transparent quota formula; a second round of ad hoc quota increases to enhance the representation of dynamic economies; tripling of basic votes that will increase the voice of low-income countries; and an additional Alternate Executive Director for Executive Directors elected by a large number of members, which will benefit the two African constituencies on the Executive Board.
The proposal is forward-looking and dynamic, recognizing that representation will need to adjust to changes in the global economy. Every five years, the Executive Board will recommend further realignments that would raise the shares of underrepresented members. Under the new reform package, voting shares for 135 countries out of 185 member countries will increase. This change will amount to an aggregate shift of 5.4 percentage points to underrepresented countries.
The basic votes for each member will triple under the package, the first such increase since the Fund's inception in 1944. This tripling of basic votes is important as it results in an increase in voice and representation for most emerging market and low-income countries. The African constituencies on the Fund's Executive Board will be receiving additional Alternate Directors.
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