First Korean IMF Director
Oh Jong-nam represents 14 Asia-Pacific countries in IMF

Asian countries are expected to try to find their own rights commensurate with their economic statuses in the upcoming World Bank-IMF annual conference to be held beginning September 24. Oh Jong-nam, a member of the board of directors of the International Monetary Fund (IMF), has his role cut out in the annual world financial event, because he represents 14 Asian-Oceania countries in the international organization who have smaller voices in the organization compared to their economic scales because of the limit in their IMF capital contributions and Director Oh should help them increase their voices at the annual event this year.
Oh has been working as an IMF director since November last year as the first Korean to be appointed to the position since Korea became a member of the IMF 49 years ago gaining the international recognition for its economic strength as the 11th largest economy in the world.
IMF has 184 countries as its members and finance ministers of those member countries meet once every year to make decisions on important matters. Day-to-day business is run by its 24 members of board of directors, although very important matters such as member country capital contribution and new membership are decided by the finance ministers.
One of the important roles of the IMF is to watch member country's major economic policies are not intended to help its own interest, but designed to benefit all the countries in the world. Its second most important role is to extend emergency funds if a member country finds itself in need of swift financing from the international financial organization. IMF releases the loan to a member country to tide over its difficulty to meet its international obligation due to balance of payment problems.
The third important role for IMF is to extend assistance in economic policy making and its implementation. Korea represents 14 Asia-Pacific countries in the IMF including Australia, New Zealand, the Philippines, Mongolia, and Papua New Guinea, among others. Korea took over from Australia and became a member of IMF director country overseeing the interest of 14 Asian-Pacific countries last year as the result of the world recognizing Korea's economic scale as the 11th largest economy in the world in 2003. It moved up a notch in 2004 as the 10th largest. At the end of 1997, Korea became a beneficiary of an IMF loan due to its foreign exchange problems. It repaid its entire $20 billion loan and became a support country of the IMF. Two factors standout when a country becomes a donor country; it provides loans to IMF and it shares its economic development experiences with developing countries.
Director Oh said the most difficult problem as the IMF director has been that he was unable to represent Korea since he has to help other countries, too, with varying interests. It is very important not to give an impression to a member country that its interest has not been well taken care of because it is not a director country of the IMF. There is a consensus among member countries that the weight of Asian countries whose economies grew faster than world average in the past several decades in IMF is not commensurate with their economic strength. It is important to raise Korea's capital contribution to IMF commensurate with its economic strength, but the task is not easy. The reason is that political clout is considered in the decision to raise a country's capital contribution and an increase in one country's capital contribution means a reduction in other country's capital contribution.
Another difficulty is that capital contribution is up to decisions by the finance ministers of member countries, not up to the board of directors.
No countries like having their economic policies monitored by the IMF, even countries receiving IMF loans do not like IMF meddling in their economic policies because they look like colonies The next difficulty is quotas. The U.S. has the largest quota with 17 percent, followed by Japan with 6 percent and Britain, France and Germany with 5 percent each. Other countries don't even count. The U.S. virtually enjoys veto power due to its large quota because membership or an increase in capital contribution requires more than 85 percent of quota approval and the U.S. is key to the decision. A key agenda item during this year's annual meeting would include debt forgiveness for poor countries and the trade deficit of the U.S. and trade surplus of Asian countries trading with the U.S. Asian countries including Korea and Japan would try to argue for increasing their voices in IMF commensurate with their economic might. nw

IMF Director Oh Jong-nam.