November 08, 2010 12:07
Emerging countries will now have a greater say within the International Monetary Fund, especially the rapidly growing economies of Brazil, Russia, India and China, which all made it into the top 10 in terms of IMF voting shares. China saw its share rise from 4 percent to 6.39 percent, the third greatest in the IMF after the U.S. and Japan. Korea's share rose from 1.41 percent to 1.8 percent, up from 18 to 16.
IMF officials on Friday agreed on a set of reforms of the share and governance structure following a deal reached at the recent G20 Finance Ministers and Central Bank Governors Meeting in Gyeongju. Six percent of shares went over to emerging and advanced countries, and the fund's capital will be increased by 100 percent.
The power of emerging countries is strengthening due to the reform. Western countries had exercised excessive power compared to their economic size but are now seeing their shares decrease. The share is the money IMF member states put into the fund, and the more a member state contributes, the more influence it has in the IMF's decision-making process.
India, Brazil and Russia saw their ranks rise between one and four notches. The combined shares of the so-called BRICs countries now totals 14.17 percent, close to the 15 percent needed to exercise a veto.
Western European countries' shares dropped. France, the U.K., the Netherlands, Belgium and Switzerland saw their shares decline and their rankings fall one to five notches. The U.S.' share fell from 17.67 percent to 17.41 percent, but it keeps its veto and remains the country with the greatest power in the IMF.
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