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Last Updated: Sunday, 17 September 2006, 12:10 GMT 13:10 UK
IMF leaders back shake-up plans
A Chinese factory
Changing voting rights at the IMF would give a bigger voice to China
Leading members of the International Money Fund have agreed unanimously to back proposed reforms giving more IMF voting rights to emerging economies.

The IMF does not have "a one member one vote" constitution, but voting power is linked to economic criteria.

The IMF's 184 members are voting on a proposal to change voting - which would immediately increase the votes of China, South Korea, Turkey and Mexico.

Now its top steering committee, chaired by Gordon Brown, has backed the move.

Mr Brown described the move as the biggest shake-up of the IMF in six decades.

"We welcome today's agreement to a comprehensive reform package for [voting] quotas which, if moved forward, we want to be completed no later than the 2008 annual meetings," the UK chancellor said.

"These reforms we agreed should also enhance the participation and voice of low income countries in the IMF."

Two-stage plan

The IMF's 24-strong International Monetary and Financial Committee is meeting in Singapore. The proposal needs to win 85% of votes to pass. The voting deadline is Monday afternoon, and results will be announced after that.

Votes are currently weighted partly in line with financial contributions to the IMF, which in turn is related to the size of the country's economy.

The first stage of change is the immediate recalculation of the votes allocated to China, South Korea, Turkey and Mexico. The second stage would be a review of how votes are calculated with further changes based on some new formula.

However not all emerging nations are behind the new proposals, with Argentina and Brazil wanting to see their voting share increased quickly too.

And India believes the fund should overhaul the system in one step, not in the proposed two steps which are being voted on now.

The US vote at the IMF counts for about 17% of the total, and Japan has 6.1% of the vote. Argentina has a voting share of 0.99%, and Swaziland has 0.03% of the vote.

Indian opposition

Meanwhile, there were further positive noises about restarting stalled global trade talks.

Mr Brown said he was optimistic about breaking the Doha round deadlock, after US Treasury Secretary Henry Paulson said the US remained "fully committed to achieving a successful outcome".

Mr Brown also said he believed Pascal Lamy, director-general of the World Trade Organization, would be able to make progress on a deal by the end of the year to remove barriers to global trade.

But Indian Commerce Minister Kamal Nath said his country's rural economy was too precarious for the country to consider opening up its market further to imports of farm goods.

"There is no question of India making concessions at all where agriculture is concerned because our issue is subsistence," Mr Nath said.


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