Bonds News

In letter, economists urge IMF governance reforms

WASHINGTON, Sept 28 (Reuters) - Thirteen U.S.-based and other economists on Tuesday called for a “timely conclusion” to International Monetary Fund reform to make the global lender more representative of all its members.

In an open letter to the IMF’s board of governors, the group said the IMF had responded flexibly to help countries during the global financial and economic crisis but was slow to agree on governance reforms.

The IMF’s board of governors is made up of finance ministers or central bank chiefs from the fund’s 197 member countries, which will ultimately sign off on the reforms.

“We urge you to support a comprehensive package that addresses key reforms of IMF governance in order to generate a tangible shift in the representation, inclusiveness and accountability of the institution,” the economists said ahead of a gathering of global financial leaders at the IMF and World Bank meetings on Oct. 8-9.

The call comes amid an increasing power struggle within the IMF on how to give emerging powers more influence in the global institution through adjustments to voting shares and board seats. [ID:nN25162796].

The IMF has long been dominated by the United States and Europe and its governing structures still reflect the post-World War Two order under which it was created.

Under proposals currently being negotiated by countries to reflect the rapid rise of emerging economic powers, China could leap-frog industrial powers like Germany. [ID:nN27259467]

The letter included signatures by Nancy Birdsall, president of the Center for Global Development, economists Colin Bradford, Ralph Bryant and Johannes Linn of the Brookings Institution; Domenico Lombardi of Brookings and president of the Oxford Institute for Economic Policy, John Sewell of the Woodrow Wilson Center, Paola Subacchi of Chatham House, Jo Marie Griesgraber of New Rules for Global Finance, Pamela Gomez of development group Oxfam, and Daniel Bradlow of the University of Pretoria.

The group called for:

* A timely conclusion to a review of voting power in the IMF with a shift of at least 5 percent in quota shares from advanced to emerging economies, while safeguarding the position of poorer countries;

* A recomposition of the IMF board through a major consolidation of European chairs to give emerging economies a bigger voice;

* Significant improvements to limited and outdated disclosure standards of board decisions including the timely disclosure of board transcripts and documents;

* A transparent, open and merit-based selection of senior management and leadership of the IMF and other international organizations without restrictions based on nationality, and

* A lowering of the 85 percent supermajority rule for decisions other than amendments to the articles of agreement. (Reporting by Lesley Wroughton; Editing by Neil Stempleman)