IMF promises to give poor more votes

Washington, October 22:

The International Monetary Fund (IMF) sought to respond to anger in developing countries at the institution’s dominance by rich western nations by promising an increase in voting rights for the world’s poorest nations.

Admitting that the IMF had to ‘address the issue of its own legitimacy’, its outgoing managing director, Rodrigo de Rato, said the package of reforms would go beyond the deal struck in Singapore a year ago. He said that the changes would see a shift in power to bigger emerging countries while an increase in the basic votes - the votes that each of the fund’s members have regardless of their size would ensure that the least developed nations did not lose out.

In Singapore it was agreed that the basic votes would need to be more than doubled, but the IMF’s managing director said the increase would now need to be bigger.

With president Luiz Inacio da Silva of Brazil floating the idea this week that developing countries should set up their own alternatives tothe IMF and World Bank, Britain’s finance minister Alistair Darling will call this weekend for basic votes for poor countries to be tripled.

de Rato, who will be replaced at the IMF by Dominique Strauss-Kahn next month, said, “We need to enhance our legitimacy and we are doing so. This is a marathon not a sprint but we will meet the goal of updating our governance structures by this time next year.” Aid agencies said, however, that the reforms needed to go much further.

Elizabeth Stuart, senior policy adviser for Oxfam International, said, “Rato has failed to deliver on promised reform.”