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Last Updated: Monday, 18 September 2006, 22:43 GMT 23:43 UK
IMF reforms give China more power
Chinese Finance Minister Jin Renqing in Singapore
The reforms are a triumph for China
Members of the International Monetary Fund (IMF) have agreed reforms giving China and other emerging economic powers more say in how it is run.

At its annual meeting in Singapore, the IMF's 184 members approved plans to boost China's voting rights and financial contribution to the body.

Critics had said the IMF was dominated by the US and European countries, and poorer nations were under-represented.

Quotas determine how much a country can borrow and influence lending policies.

More influence

The IMF's main objective is to ensure global financial stability and to support the international financial system in times of crisis.

Its critics had argued that its lopsided voting system meant that it was in danger of losing credibility, with countries either ignoring its advice or turning to other sources of emergency funding.

These governance reforms are tremendously important for the future of our institution
Rodrigo de Rato, IMF managing director

The IMF's existing structure, which effectively gives the US twice the voting rights of any other member, dates back to its foundation in 1945.

Reforms agreed in Singapore will see China, South Korea, Mexico and Turkey all gain greater influence within the IMF.

China will, in effect, become the IMF's sixth most powerful member behind the US, Japan, Germany, France and the UK.

China currently has fewer votes than either Belgium or the Netherlands, even though its economy is twice the size of the two combined.

Root and branch reform

The IMF also agreed to a root and branch review of its voting arrangements and financial contributions by 2008.

"These governance reforms are tremendously important for the future of our institution," said managing director Rodrigo de Rato.

"They will enhance our effectiveness and add legitimacy to all of the other reforms we are implementing."

South Korea, one of the countries which will benefit directly from the reforms, welcomed the shake-up.

"It has special meaning for South Korea, which went through the Asian financial crisis of 1997/8, because the quota is the basis for deciding the size of loans from the IMF," its finance ministry said.

However, the changes are not universally popular.

More than 20 countries opposed them, with dissenting voices mainly coming from Latin America and the Middle East.

BBC economics correspondent Andrew Walker said some countries thought the reforms had not gone far enough.

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