Shifting gears at the IMF

The IMF has many issues to deal with in this rapidly chaning globalized world. Some have even at some point questioned its further legitimacy as a fireman for the international economy. Another issue which the fund shares with many of the other great global institutions born out of the turmoil of the Second World war is the question of governance and authority within the organization. On this last point it could seem as if the dust is finally coming off?

(From the FT) 

'China, South Korea, Turkey and Mexico could win increases in their International Monetary Fund quotas – or shareholdings – “in a few days”, as an early step towards giving big developing countries more say in the institution, according to Rodrigo Rato, IMF managing director.'

(...)

'The reform process has been driven by the need to adapt both the governance and role of the IMF to reflect the significant shifts in global economic power, particularly since the rise of Asian and other developing economies.

Mr Rato said he expected to be given a clear mandate to implement a two-stage reform at the fund’s annual meeting next month in Singapore. Details of this proposal, which remain confidential, were put to the IMF’s governing board last week.

Mr Rato warned against expecting any breakthroughs on global economic imbalances resulting from the IMF’s new multilateral consultation process at the Singapore meeting.'

(...)

'Mr Rato said there was agreement that the second stage of IMF reform would have to address governance and control of the fund, better to reflect “changes in world economic weight” and also to tackle the “representation of low-income countries”.

“There is consensus that we should address these in a package of reforms that should be launched at Singapore,” he said. Mr Rato said he would aim to complete the process within roughly two years.'

(...)

'Mr Rato said “there is consensus that the existing formula is unsatisfactory” and should be simplified. He said member governments also agreed that the new formula should be based on GDP and openness, and perhaps other criteria, but that so far no consensus had been reached on what weight to give each factor.'

I for one welcome such initiatives and might I suggest something similar at the UN security council?