The IMF's directors approved a major change in its voting mechanism on Friday, giving some larger developing countries more of a say in how the 185-nation lending organization operates. The board stopped short of major reforms that critics had demanded.
Dominique Strauss-Kahn, who took over as head of the IMF last September with a vow to make the IMF more relevant, said the change will help restore the 68-year-old organization's credibility.
"Today's agreement is a major step forward," Strauss-Kahn said at a news conference. "But it is only a first step. The beginning of moving is better than staying where you are."
China, South Korea, India, Brazil, countries with booming economies who for more than a year have been demanding a bigger role in IMF decisions, are among the largest gainers under the new formula. Iran, Russia and Saudi Arabia opposed the voting share change, while Egypt and Argentina abstained.
Britain, France and Canada backed the changes even though the plan will cost them some voting power in the short term. Strauss-Kahn said these nations recognized they may be better off with the new formula over the long run.
The US, the leading contributor to the IMF and its biggest shareholder, agreed to forgo an increase in its stake to which it was entitled, the IMF said.
The changes must be approved by the IMF's governors before April 28 and will be discussed when they meet April 12 in Washington.
Strauss-Kahn, a former French finance minister, predicted the proposal would have more than enough support to pass, as countries that abstained in Friday's voting register their votes for or against.
"We can expect that finally the result will be higher than the result of today," he said.
The IMF is a global financial watchdog with a mandate to monitor the health of the world economy and provide technical and financial help to its members. In the past it has lent billions of dollars to nations as they faced financial crises, but in recent years its lending, and the income it made from the loans, has been steadily declining.
Some critics have started questioning its relevance as a player in global markets.
One of those critics, the development group Oxfam International, said the voting changes were "little better than the status quo for some countries and a setback for the majority.
"Clearly this cannot be the end of a process for an institution desperately seeking credibility," said Liz Stuart, Oxfam's senior policy adviser. "Mr Strauss-Kahn should quickly put options on the table for genuine reform."
The new structure backed by IMF members would for the first time take into account purchasing-power parity in determining voting share, rather than gross domestic product as determined by market currency exchange rates.
The result is that developing countries on the whole will gain somewhat more voice, moving from 39.4 percent in quota share to 42.1 percent when Friday's changes are taken into account together with share increases approved in 2006, the IMF said.
EXTRATERRITORIAL REACH: China extended its legal jurisdiction to ban some dual-use goods of Chinese origin from being sold to the US, even by third countries Beijing has set out to extend its domestic laws across international borders with a ban on selling some goods to the US that applies to companies both inside and outside China. The new export control rules are China’s first attempt to replicate the extraterritorial reach of US and European sanctions by covering Chinese products or goods with Chinese parts in them. In an announcement this week, China declared it is banning the sale of dual-use items to the US military and also the export to the US of materials such as gallium and germanium. Companies and people overseas would be subject to
Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) founder Morris Chang (張忠謀) yesterday said that Intel Corp would find itself in the same predicament as it did four years ago if its board does not come up with a core business strategy. Chang made the remarks in response to reporters’ questions about the ailing US chipmaker, once an archrival of TSMC, during a news conference in Taipei for the launch of the second volume of his autobiography. Intel unexpectedly announced the immediate retirement of former chief executive officer Pat Gelsinger last week, ending his nearly four-year tenure and ending his attempts to revive the
WORLD DOMINATION: TSMC’s lead over second-placed Samsung has grown as the latter faces increased Chinese competition and the end of clients’ product life cycles Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) retained the No. 1 title in the global pure-play wafer foundry business in the third quarter of this year, seeing its market share growing to 64.9 percent to leave South Korea’s Samsung Electronics Co, the No. 2 supplier, further behind, Taipei-based TrendForce Corp (集邦科技) said in a report. TSMC posted US$23.53 billion in sales in the July-September period, up 13.0 percent from a quarter earlier, which boosted its market share to 64.9 percent, up from 62.3 percent in the second quarter, the report issued on Monday last week showed. TSMC benefited from the debut of flagship
TENSE TIMES: Formosa Plastics sees uncertainty surrounding the incoming Trump administration in the US, geopolitical tensions and China’s faltering economy Formosa Plastics Group (台塑集團), Taiwan’s largest industrial conglomerate, yesterday posted overall revenue of NT$118.61 billion (US$3.66 billion) for last month, marking a 7.2 percent rise from October, but a 2.5 percent fall from one year earlier. The group has mixed views about its business outlook for the current quarter and beyond, as uncertainty builds over the US power transition and geopolitical tensions. Formosa Plastics Corp (台灣塑膠), a vertically integrated supplier of plastic resins and petrochemicals, reported a monthly uptick of 15.3 percent in its revenue to NT$18.15 billion, as Typhoon Kong-rey postponed partial shipments slated for October and last month, it said. The
RSS