Persuasion Needed For Changes In
IMF -- Africa
South
Africa's Finance Minister, Trevor Manuel has said that
monumental persuasion is needed to convince the United States
and Western Europe to give up their dominance of global
institutions, such as the IMF.
Speaking in an interview in the
United States, he said there was overall agreement that voting
power in the International Monetary Fund needed to be adjusted
to reflect the rising influence of countries such as China and
India.
In his words, “Nobody can
quite take the big steps necessary and sometimes it's because
finance ministers and central bank governors need political air
cover which isn't forthcoming,” Manuel said on the sidelines of
an IMF and World Bank meeting in Washington.
“You're
telling these countries that have acquired these rights that in
the interests of broader democracy they got to give it up, and
that's a problem we run into, which is why it will require
monumental persuasion,”
he said.
“We have to
maintain the pressure,”
said Manuel ahead of the meeting of the next G20
in Cape Town in November, where IMF reforms will be high on the
agenda.
Initiative
IMF members have been trying for
more than a year, to agree on a new formula for distributing
voting power more equally. The IMF, which was central in
fighting global financial crises in the 1980s and 1990s, is now
gearing itself more towards policing the world's economies since
fewer countries are turning to it for emergency loans.
Manuel said IMF monitoring of
members' economies was important, but it needed to be applied
even-handedly.
Proposals
Last fall, the IMF's 185
member countries endorsed a plan that increased the voting power
of China, Mexico, Turkey and South Korea with promises of a
second round of reforms to be completed in 2008 based on a new
voting formula.
Together with Australia and
Brazil, South Africa helped craft a proposal for discussion at
the IMF meetings this weekend, which raised the voting power of
under-represented emerging economies, while also strengthening
positions of poor countries.
The IMF's steering committee
on Saturday proposed an overall increase of member countries'
votes in the order of 10 percent and at least a doubling of
so-called basic votes to benefit lesser-developed nations.
While some countries said the
decision represented progress, others in Europe said developing
countries' demands were stronger than ever and an agreement was
a long way off.
REUTERS/YINKA
