28 August 2006
A proposed revision of voting shares at the International Monetary Fund could leave Africa with even less of a say in the institution's operations. The Fund's governors will consider increasing the votes of China, South Korea, Mexico and Turkey, at the organization’s Annual Meetings in September. African governors may veto the proposal if it does not include firm commitments to protect the voice of low-income countries. Als available in Spanish.
en Espanol: ¿Menos acciones con derecho a voto para África en el FMI? (Choike website)
African countries have expressed serious concern that their voice within the International Monetary Fund (IMF) will be further marginalized after the Fund’s September Annual Meetings in Singapore. At the upcoming gathering, the IMF's governors are scheduled to discuss the adjustment of the quotas (shareholding) of certain member countries, which would affect the allocation of voting power on the institution's Board of Directors.
Quota and vote increases are expected for China, South Korea, Mexico and Turkey in order to reflect the relative size of their economies. A rise in the proportion of votes held by these countries would mean a reduction in the relative voting power of others--particularly worrisome for African countries that already have very little influence over the institution which dictates many of their economic policies.
The collective votes of the Fund's 47 sub-Saharan African member countries’ currently amount to only 5 percent of the total, shared between the three executive directors representing the continent where the IMF arguably wields the most influence. The United States alone, on the other hand, wields over 17 percent of the voting shares within the Fund. By some accounts, the proposed quota adjustments could reduce Africa’s collective share of the vote to only 2.1 percent.
A country's quota determines its financial membership commitment to the IMF, which in turn determines its voting power within the institution as well as its access to IMF financing. African officials have indicated that they do not oppose increased voting power for other countries, but feel it should not come at the expense of Africa’s voice, particularly considering the extent of Fund activities and lending on the continent.
In a letter to all African Governors of the IMF, dated August 28, the three Executive Directors representing sub-Saharan Africa on the Fund's Board indicated that they would vote against the proposed reform of quotas and votes when it came before the Board of Directors on August 31st, and encouraged African governors to reject the proposal if presented to them in its current form at the Annual Meetings in Singapore. They argue that without any firm, time-bound commitments to protect the voice of low-income countries, the current proposal would further weaken Africa's position in the Fund.
Additional Resources
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Africa seeks more power in IMF, World Bank, Daily Trust (Abuja), August 7, 2006 (AllAfrica.com)
- US to support more IMF votes for China by Paul Blustein, August 24, 2006 (WashingtonPost.com)
- Africa calls on Brown to block IMF voting reform, The Guardian (London), August 31, 2006 (www.guardian.co.uk)
- IMF Executive Directors and Voting Power (IMF.org)
- European CSO Open Statement on Governance Reform of the IMF, July 17, 2006 (Bretton Woods Project)