Korea IMF quota set to rise to 1.8%

Korea will have a bigger voice at the International Monetary Fund, as the organization is expected to increase the country’s quota share from the current 1.41 percent to 1.8 percent as part of an adjustment that gives a greater say to emerging countries. The quota change will result in Korea becoming the 16th biggest voting power among the IMF’s 187 member nations, up two notches from 18th. Korea will increase its contribution to the IMF from $5.3 billion to $13.5 billion. The IMF executive board met on Friday, Washington time, to approve the readjustment of the quota system based on an agreement reached by the G-20 finance ministers and central bank governors in Gyeongju last month. The IMF will transfer 6 percentage points of the quota from developed nations to emerging countries, including China, India and Turkey. This was a bigger allotment than that proposed at the G-20 Summit in Pittsburgh in September 2009, when it was decided that a quota shift would amount to 5 percentage points. This is the first change in the IMF quota structure in 12 years. “This historic agreement is the most fundamental governance overhaul in the Fund’s 65-year history,” Dominique Strauss-Kahn, IMF managing director said in a statement on Friday. The proposal will be voted upon by the 187 member nations by Dec. 15 and will be implemented once it receives by 85 percent of the IMF board. The proposal also needs to be approved by national legislatures. Along with Korea, quota shares for other emerging nations will increase, including China, which will see its quota raised from 4 percent to 6.39 percent, allowing the country to rank as the third-biggest power after the United States with 17.41 percent and Japan with 6.46 percent. The quota for Brazil, Russia and India were increased by 0.53, 0.21, and 0.31 percentage points, respectively. This means the so-called BRIC countries will have combined total of a 14.17 percent quota, allowing them to veto proposals with the aid of other emerging nations. The quotas for other nations, including Saudi Arabia, Belgium, Germany and Canada will fall. source:joongang daily