PRANAB TWO LAST

Developing nations are demanding greater voting rights
in both the IMF and World Bank. The G-20 nations last month
agreed to shift five per cent voting share in the IMF, against
the demand for seven per cent.

Mukherjee said far reaching changes to the governance
structure of the international financial institutions are
needed to reflect the changing dynamics of the global economy.

As a first step, the early ratification of the quota
reforms for IMF is an urgent requirement, he said.

The next quota review should be completed by January
2011. "To preserve the Fund as a quota-based institution, at
the minimum there should be doubling of quotas," he said.

Parity in the vote shares of developed and developing
countries would enhance the legitimacy of IMF, Mukherjee said.

"This can be achieved through a 7 to 8 per cent shift in
quota shares. Even to achieve the shift of at least 5 per
cent called for by the G20 leaders in Pittsburgh, we would
have to work beyond the current quota formula," the Finance
Minister said.

Mukherjee said other aspects of governance reforms should
follow and flow from the quota rebalancing.
The Finance Minister also highlighted the importance of
six per cent shift in vote share in World Bank in favour of
the developing nations.

IMF Managing Director Dominique Strauss Kahn said the
quota shift in favour of developing countries will boost
legitimacy of IMF. "This will be done by January 2011...and
represents a significant down payment on our future
effectiveness," Kahn said. PTI IND
SDE


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