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IMF voting reform gets go-ahead of ministers
By DPA
Apr 13, 2008, 12:21 GMT

Washington - A long-awaited reform of the International Monetary Fund's voting procedures that gives developing countries a modest increase in influence has received broad support from the IMF's members, Italy's finance minister said Saturday.

Tommaso Padoa-Schioppa said the new voting rules unveiled last month had been 'fully endorsed' by the 24 finance ministers attending the IMF's traditional spring meetings in Washington.

The new initiative would shift voting rights by 2.7 per cent away from advanced economies and in favour of developing countries. It still has to be formally approved by 85 per cent of the lending institution's 185 members, according to current voting shares.

IMF Managing Director Dominique Strauss-Kahn described a 'long list of ministers' expressing support for the reforms during Saturday's meeting of the IMF's International Monetary and Finance Committee, and said he was confident it would pass by the end of the month.

'So we have large support, different kind of countries, different level of income, different level of development, different part of the world, approving' the reform, he said.

A statement from the committee said only that it 'looks forward' to the approval of the vote increases, which were unveiled by the IMF's executive board last month after long and difficult negotiations.

Developing countries have long argued for a greater voice in the IMF and its sister-lender the World Bank. Some countries have resorted to bilateral and regional lending initiatives in protest against their lack of influence.

Padoa-Schioppa said it was 'no accident' that the voting reforms came on the back of a global economic downturn. The Italian minister said the inter-connectedness of the financial crisis and wider slowdown has shown the need for strong international institutions to respond.

Gathering on the sidelines of the IMF meeting, ministers from the world's seven top industrial nations on Friday agreed to a package of joint measures to improve regulation of the financial sector, which has been hit with billions of dollars in losses stemming from the US mortgage market crisis.

The voting reforms still leave industrial nations with greater influence over the body's decisions, by about 57-43 per cent, and many developing countries have offered only their tacit support for the increases.

A group of 24 developing nations on Friday said they supported the initiative as an initial step but would not rest until they achieved 'parity' in the IMF and the World Bank.

US Treasury Secretary called the reforms a 'first step forward in the right direction' but said more 'ambitious' changes, including a streamlining of the IMF's 24-member executive board, would be needed in future.

Elizabeth Stuart of aid agency Oxfam said the IMF continued to 'stymie the voice of so many countries of growing geopolitical importance ... ensuring that more stakeholders will walk away from the institution.'

The World Bank will begin its own discussions on reforming voting procedures at its committee meeting on Sunday.