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The IMF’s 2008 Quota and Voice Reforms Take Effect
Press Release No. 11/64
March 3, 2011
The 2008 Quota and Voice Reforms of the International Monetary Fund (IMF) entered into force today, following ratification of the Amendment on Voice and Participation to the Fund’s Articles by 117 member countries, representing 85 percent of the Fund’s total voting power.1
The amendment strengthens the representation of dynamic economies in the IMF and enhances the voice and participation of low-income countries. These 2008 Quota and Voice Reforms were followed by further reforms in 2010 that, once effective, will lead to a further shift of more than 6 percent of quota shares to dynamic emerging market and developing countries.
“I commend our members for taking the required action to ratify this package of reforms adopted in 2008,” said IMF Managing Director Dominique Strauss-Kahn. “The implementation of this reform reflects the membership’s commitment to strengthening the IMF’s effectiveness, credibility, and legitimacy.
“The next step in this process will be for governments to ratify speedily the 2010 Amendment on the Reform of the Executive Board and to implement the quota increases to further align representation in the IMF with global economic realities,” he added. “This will represent the most fundamental governance overhaul in the IMF’s 65-year history and the biggest-ever shift of influence in favor of emerging market and developing countries.”
The 2008 Quota and Voice Reforms, which required the amendment to the IMF’s Articles of Agreement,
• Result in a significant shift in the representation of dynamic economies through quota increases for 54 member countries amounting to SDR 20.8 billion (about US$32.7 billion), which will become effective for those members that have consented to their increases once quota subscriptions are paid
• Enhance the voice and participation of low-income countries through an almost tripling of the basic votes of which each member has an equal number
• Establish a mechanism that will keep constant the ratio of basic votes to total votes in the IMF
• Enable Executive Directors representing 7 or more members to appoint a second Alternate Executive Director following the 2012 regular elections of Executive Directors.
For details of the reforms, see Press Release No. 08/64 and IMF Quota and Voice Publications.
In December 2010, the Board of Governors approved further quota and governance reforms with the completion of the 14th General Review of Quotas and an amendment of the IMF’s Articles of Agreement on the reform of the Executive Board (see Press Release No. 10/477; the relevant documentation on the 2010 reforms will be published shortly here.)
This package, once it too is ratified, will double quotas to approximately SDR 476.8 billion (about US$751.1 billion), shift more than 6 percent of quota shares to dynamic emerging market and developing countries, and protect the quota shares and voting power of the poorest members.
With this shift, Brazil, Russia, India, and China will be counted among the Fund’s 10 largest shareholders. In addition, the 2010 reforms will lead to an all-elected Board, and advanced European countries are committed to consolidate their representation by two chairs (see Press Release No. 10/418). A comprehensive review of the quota formula will be completed by January 2013 and the 15th General Review of Quotas will be brought forward to January 2014.
Useful links:
IMF Survey story on 2008 reforms
http://www.imf.org/external/pubs/ft/survey/so/2008/NEW032808A.htm
Documents relating to quota and voice reforms agreed in 2008 and 2010:
http://www.imf.org/external/np/fin/quotas/pubs/index.htm
Comparative table of quota shares before and after implementation of reforms:
http://www.imf.org/external/np/sec/pr/2011/pdfs/quota_tbl.pdf
1 An amendment to the IMF’s Articles of Agreement enters into force for all members on the date the IMF certifies that three-fifths of IMF members representing 85% of the total voting power have accepted the amendment.
http://www.imf.org/external/np/sec/pr/2011/pr1164.htm
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