'IMF quota increase should apply to all'

The International Monetary Fund's voting structure should be overhauled to reflect the current weight of each of its 184 member countries in the global economy, US Treasury under-secretary for international affairs Tim Adams said on Saturday.
"The IMF's governance structure should ensure that every member has a voice, with each country's vote scaled to reflect its weight in the world economy," Adams said in a speech to the Aspen Institute Italia in Florence, Italy.
Top IMF officials are consulting with governments around the world on the proposed two-stage reform starting with an ad hoc increase for China, South Korea, Turkey and Mexico, which are underweighted under the IMF's current quota formula.
The second step could see adjustments of basic votes for other countries and changes in the distribution of seats on the IMF's 24-member board, which is dominated by Europeans.
G-24 members in Asia, the Middle East, Africa and Latin America have called for a more comprehensive package of proposals with a timetable leading to greater representation. They fear that the rich countries could lose their appetite for reform after any initial quota increase.
In remarks at the IMF's spring meeting in April, then-US Treasury Secretary John Snow said the United States hoped that by the next gathering in September, in Singapore, there would be approval of "a limited ad hoc increase" in voting powers for the most under-represented of the IMF's 184 member countries.
"The world economy has evolved considerably in the past decades, and the IMF structure should reflect these changes," Adams said in the prepared text of his speech. "An IMF that better reflects its members would be more effective in its operations, in part because its legitimacy would be enhanced," he added.
Adams, in a speech about the benefits and dangers of regional integration, said groupings should not be a new form of isolationism or counterweights to global institutions and arrangements but seek to build on existing consensus.
"The Chiang Mai Initiative in east Asia is an ambitious effort to create a regional financing facility, but so far too little is known by the markets or by potential borrowers about amounts available, with or without an accompanying IMF adjustment program, and the conditions, if any, Chiang Mai creditors would impose," he said.
The Chiang Mai Initiative is a network of currency swap lines launched by the ASEAN+3 group in 2000 to avoid a repeat of the 1997 Asian financial crisis.