IMF chief supports giving China greater voting rights

investmentweek.co.uk:

Currently China’s quota is less than Japan’s, despite its larger share of global gross domestic product.

In an interview with the FT, Georgieva said the IMF must adapt «to reflect how the world economy is changing», in a veiled reference to China having only 6% voting power while being a global and economic superpower.

Reforms to funding are necessary to avoid the «devastation» that would be wrought if the IMF remains without adequate financial resources to aid struggling countries, she said. 

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However, Georgieva noted she is «optimistic that we will go there», in reference to voting changes, and pointed to the way the IMF «has been able to mobilise and overcome differences in views so many times».

Each country that is a member of the IMF has a ‘quota', which dictates how much it contributes to the fund, as well as its voting weight and access to emergency financing. This is based on its ranking in the global economy.

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Currently China's quota is less than Japan's, despite its larger share of global gross domestic product. The US holds roughly 17%, making it the IMF's largest shareholder, and giving it veto power over quota decisions, which require 85% support.

The IMF's board of governors reviews quotas at least once in every five year period, but changes can take a while to take effect, with the last round of changes agreed in 2010 and put in place in 2016. China's economy has grown considerably in the 13 years since the last quota reforms.

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