Swiss support developing nations at IMF
Switzerland was one of many countries that threw its weight behind reforms to boost the voting power of countries such as China in the International Monetary Fund.
In Monday’s vote, the IMF’s 184 members overwhelmingly voted to correct the under representation of some emerging nations, whose economies are now among the world’s largest.
“The reforms are necessary as emerging countries were under-represented,” said Swiss Finance Minister Hans-Rudolf Merz ahead of the joint World Bank/IMF meeting. Merz is attending together with Economics Minister Doris Leuthard and Jean-Pierre Roth, president of the Swiss National Bank.
In Monday’s vote, over 90 per cent of IMF members agreed that China, South Korea, Mexico and Turkey should have more clout in the world body. Even though China’s economy is now the world’s fourth largest, it has fewer votes than countries such as Belgium (18th largest economy) or the Netherlands (16th largest).
China’s position in the IMF member rankings will now rise from ninth to sixth.
Crucial
IMF managing director, Rodrigo Rato, described the outcome as “tremendously important for the future of our institution”.
“They will enhance our effectiveness and add legitimacy to all of the other reforms that we are implementing,” he noted.
The decision to boost the voice of some emerging nations is the first part of a two-step reform plan. A second, more controversial phase aims to develop a new formula to calculate the quotas, which as well as voting rights also determine how much a member contributes to the Fund and its access to financing.
Switzerland, like many other European Union countries, is demanding a clearer system of calculation that takes into account other criteria apart from Gross Domestic Product (GDP).
Graft
Finance ministers also gave their full support on Monday for a new strategy for dealing with corruption.
After long debate, ministers backed World Bank President Paul Wolfowitz to move ahead with an anti-corruption campaign that he has put at the heart of the Washington-based lender’s activities.
“It is of fundamental importance. It is about making certain that money goes to schools and textbooks for children, medicines for mothers and creating job opportunities for the poor – not to line the pockets of the rich and powerful,” said Wolfowitz.
Certain countries, such as Britain, France and Germany, are concerned that the crusade against corruption is slowing the flow of loans and punishing the poor.
swissinfo with agencies
Switzerland has been a member of the World Bank and the International Monetary Fund since 1992.
Switzerland sits on the executive boards of both institutions and leads a voting group which includes Azerbaijan, Uzbekistan, Kyrgyzstan, Poland, Serbia-Montenegro, Tajikistan and Turkmenistan.
The World Bank provides loans, technical assistance and institutional advice, while the IMF promotes monetary cooperation, financial stability and crisis prevention.
On behalf of this constituency, Switzerland holds one of the 24 seats on the executive boards of the IMF and World Bank respectively.
More than 10,000 people have converged in Singapore from September 17-20 for the International Monetary Fund and World Bank annual meetings.
Delegations from 184 IMF and Bank member countries will formally consider strategies on governance, clean energy, trade, and education.
Traditionally held in Washington, DC two years out of three, the annual meetings this year are being hosted by a country that went from developing to developed in one generation as 250 million people in Asia emerged from poverty in the last decade.
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