There is broad consensus among International Monetary Fund member countries that China, South Korea, Turkey and Mexico should get bigger IMF voting rights in a proposal to be discussed by the executive board on Wednesday, officials say.
The proposal is the first to emerge since the IMF launched a review of its voting system, or member country quotas, more than a year ago, with a view to giving emerging powers in Asia and elsewhere more say in running the institution.
Changes are expected to be formally adopted by the IMF's 184 member countries during the IMF and World Bank meetinngs in Singapore in September. IMF board officials who had seen the proposal and agreed to speak on condition of anonymity told Reuters the combined ad hoc increase for the four countries would probably range between 1.5 and 2.5 percent.
The quotas of the four are the most underweight, based on the existing IMF formula for calculating quotas, determined roughly by a country's gross domestic product (GDP) and reserves. The officials said the proposal recommends a second phase of changes by 2008 that would see a further round of ad hoc quota adjustments based on a new formula in which GDP would carry more weight.
The voting shares of some prominent shareholders, particularly in Europe, would be adjusted lower. Agreeing on the formula to determine quotas would be the toughest part of the agreement, officials said.
The second phase would also see increases, possibly even a doubling, of the so-called basic votes of African countries, which fear they will be sidelined by the focus on emerging economies.
All member countries have the same fixed number of basic votes, irrespective of their economic weight. Some African countries have suggested that the question of basic votes be addressed in the first phase, but board officials say that will not happen.
Some developing countries are pushing for the first phase to be more substantial and include up to 10 countries. "The IMF doesn't look like the world we live in and it needs to change," a board official from a developing region told Reuters. "The question is if the adjustment will be significant enough to give emerging economies reason to stay in the Fund."
Emerging countries, frustrated with the slow progress in resolving the issue, have warned they could have less to do with the Fund and some have built up vast currency reserves so they would not require IMF help in the event of a crisis.