China urges IMF to accelerate quota adjustment
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China' central bank chief on Friday called for the International Monetary Fund (IMF) to accelerate its process to shift its quota to emerging market and developing countries.
"The quota structure is the core issue in Fund governance. The severe underrepresentation of emerging market and developing countries in the IMF seriously affects the Fund's legitimacy and effectiveness, and must be promptly corrected," said Zhou Xiaochuan, governor of People's Bank of China at the IMF and its sister institution -- the World Bank's spring meeting in Washington.
The Group of 20 (G20) Pittsburgh Summit in September had called for a shift of at least 5 percentage points, and protection of the voting rights of the poorest countries before January 2011.
But so far the quota adjustment process is slow. The previous quota reform, which was already approved by the IMFC -- the IMF's steering committee -- in 2008, has not been completed until now.
Zhou said that the IMF is a quota-based institution, and quotas should be its primary resource.
He emphasized that quota adjustment and reform is not a zero- sum game. "A Fund with a more reasonable governance structure will be better able to protect global economic and financial stability which will benefit all member countries. We urge the Fund to accelerate its work, and complete quota reviews on schedule in accordance with the G20 Pittsburgh Summit and IMFC objectives," Zhou said.
According to the IMF's latest World Economic Outlook report, growth speeds of developing countries are much faster than the advanced economies, meaning their weight in the global economy is increasing dramatically.
However, quota of the developing countries in the IMF is underrepresented.
"We expect the review to leave no member's quota share severely misaligned," Zhou said.
