Bigger Say in IMF?

IMF to upgrade Korea's quota to rank 19th at its Singapore meeting: IMF Dir-Gen. de Rato

South Korea's quota at the International Monetary Fund(IMF) will be increased to 19th largest among member countries, up 9 steps from 28th at the annual general meeting of the IMF scheduled to take place starting September 18th in Singapore, said Oh Jong-nam, director of the IMF, during his recent meeting with Korean reporters assigned in Washington.
Korea will be samong the countries whose quotas will be increased at the upcoming IMF meeting including Mexico, China, and Turkey and Korea will have the largest increase among those countries, Oh said.
IMF, in its board of directors meeting on August 31st, resolved that Korea's quota will be increased from 0.764 percent to 1.346 percent, along with those of three other countries. Accordingly, Korea's side drawing rights will be increased to 1.297 billion SDR, equivalent to 1.840 trillion won.
With the increases in their quotas, China will be move to 6th from 8th in the scale of its IMF quota, Mexico from 19th to 16th and Turkey from 42nd to 36th.
Rodrigo Rato, IMF director-general, also said those four countries will have their quotas increased in Singapore. During his interview with the Financial Times, the top IMF official said the world lending organization will have one of its biggest reform since its creation in 1944 at the annual meeting with the board of directors in the process of changing management and supervisory systems. Many indicated that the IMF should consider the change in the world economy including the emergence of such countries as Korea, and China as economic powerhouses and quota increases for the four countries have been accepted as a foregone conclusion.
He said the second stage reform plan is likely to be approved at the Singapore annual meeting, although he did not reveal the contents of the reform plan, which was submitted to the board of directors meeting.
Director Oh said, "Voting is being held among member countries based on the decision by the board of directors from September 1st and those countries need at least 85 percent of approval of member countries to be able to have their quotas increased formally and announced as such at the annual meeting in Singapore."Due to its low quota, Korea was unable to be a director country and Australia represented Korea and other countries including New Zealand, the Philippines, Mongolia, and Papua New Guinea.
In 1997, when Korea faced the financial crisis, and IMF provided an emergency loan, the borrowings easily exceeded 300 percent of its small IMF quota and paid $500 million in extra interest charges ranging from 3 to 5 percent per year.
Oh became an IMF director in 2004 for the first time for a Korean and Australia is scheduled to retake the directorship in next month at the expiry of his two-year term. But changes are expected in the schedule with Korea's quota increase. Since Korea's quota is the same as Australia's, the two countries may take turns to hold the directorship every two years.
Director Oh is highly regarded for his efforts to increase Korea's quota, often claiming that Korea has been unable to perform its role befitting its economic scale due to the IMF voting rights system.
Oh said Korea is now able to have a bigger voice in major economic issues within the IMF. nw