March 23, 2009 / 12:51 AM / in 10 years

Australia PM to push G20 for IMF China reform

CANBERRA (Reuters) - Australian Prime Minister Kevin Rudd will push for China to have a more central role in the International Monetary Fund at an upcoming meeting of leaders from the world’s 20 major economies, a report said on Monday.

Rudd, a China expert and fluent Mandarin speaker, would argue at a meeting of the G20 group of nations next month that China should be elevated within the IMF in an overhaul of the world economic order, the Australian newspaper said.

The shift, which Rudd would raise in a meeting this week with U.S. President Barack Obama, would likely aggravate European nations, the paper said.

“Let’s just get up with reality of the 21st century,” he told Australian television, adding the IMF’s current voting rights reflect the balance of power in the wake of World War Two.

Australia is co-chair of the G20’s working group on reform of international financial institutions and is using its position to try and boost IMF’s resources, and transform its vote structure.

A review of IMF voting quotas last year gave developing nations an additional 2.5 percent, while EU member nations have 32 percent. The United States has 17 percent, while China has 3.7 percent and India 1.9 percent. Australia has 1.5 percent.

Under Australia’s plan, Beijing’s voting stake would be increased in return for its providing financing to fill part of an around $550 billion financing shortfall in the developing world.

At the meeting of G20 finance ministers two weeks ago, China, India, Brazil and Russia called for greater voting rights for developing countries to be resolved at the London summit.

Australia’s Treasurer Wayne Swan Monday argued the G20 should be given a more prominent role in international affairs, and there was a consensus in the group around fundamental reform of international financial institutions and the IMF.

“Resources of the IMF to deal with the global financial crisis will at least be doubled, and the representation of the developing world will be significantly increased,” Swan wrote in the Australian.

Rudd earlier this month outlined a seven-point plan he intends to take to the G20, but which contradicted opposition to bank nationalization in the United States.

Rudd said big banks and financial institutions at risk of failure because of the financial crisis must be shut down or taken over by governments to ease market nerves.

Reporting by Rob Taylor; Editing by Jonathan Standing

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