Press Release: New Voting Formula at IMF Falls Short of Bringing Genuine Change

Last week, the International Monetary Fund (IMF) cautiously backed plans for some redistribution of voting power among its 185 member countries.

Dr. Yash Tandon, Executive Director of the South Centre, a Geneva-based intergovernmental thinktank for developing countries, said that "the proposed changes with respect to votes in the IMF as a result of a new voting formula – while positive in recognizing the need for such changes – do not however go far enough to remedy the governance imbalance in the IMF. What is being proposed is too little and preserves developed country control over the IMF. To be genuine about sharing governance power in terms of votes, the increase should be much more.

Genuine IMF governance reform will not occur simply through marginal increases of voting rights. The real issue is how developing countries can have a stronger ‘voice’ in IMF governance and actually shaping how the institution is run. This means that other aspects of IMF governance must also be dealt with – e.g. enhancing developing country collective action and voice in the IMF by making the constituency system more representative and strengthening the multilateral and developing country institutions that support them."

See South Centre press release at: http://www.southcentre.org/info/news_views/IMF_Voting_Rights_1April08.pdf

See quote appearing in the article "IMF governance renovations: fresh paint while foundations rot" by Bretton Woods Project: http://www.brettonwoodsproject.org/art-561041

Selecting the IMF’s Next Managing Director in an Open, Transparent, and Merit-Based Process

Benjamin Mkapa, the former Tanzanian president and the Chairperson of the South Centre board makes a call for selecting the IMF’s Next Managing Director through an Open, Transparent, and Merit-Based Process. According to Mr. Mkapa:

The decision of the International Monetary Fund’s (IMF) Managing Director, Rodrigo de Rato, to resign in October 2007 opens up an opportunity for change to occur in the selection process for his successor. The opportunity for change in the governance of the Bretton Woods Institutions that was missed by the recently continued practice of selecting the World Bank President on the basis of a nomination by the United States must not be missed by the IMF in its selection of the next IMF Managing Director.

This change should reflect the principles of openness, consensus, transparency, and merit-based selection of the heads of both the World Bank and the IMF.

Click here to read the complete text on the South Centre website