ISTANBUL (Reuters) - The Group of 24 nations on Saturday called for a significant shift in IMF voting power to developing nations and a doubling of members’ quotas to raise more resources for the global financial institution.
The G24, which includes emerging and developing countries from Latin America, Africa, the Middle East and Asia, called for a “political commitment” to shift 7 percent of quota shares from rich to developing countries.
That is larger than the 5 percent shift announced by Group of 20 major nations in Pittsburgh last week ahead of a January 2011 target for overhauling the voting system of the IMF, which has long been dominated by Europe and the United States.
The G24 also called for a seat at the G20 to make it more representative of developing countries. Most of the G24 countries, such as Iran, Nigeria, Colombia and the Philippines, are not G20 members.
“The redistribution of quotas must not be at the expense of other developing countries and must be based on a reformed quota formula which addresses the present deficiencies and bias against developing countries, including inadequate reflection of the potential need for Fund resources,” the G24 said in a communique before IMF and World Bank meetings in Istanbul.
The G24 has been vocal about the need for a major rebalancing of IMF voting power to reflect the rise of emerging market countries in the world economy.
The G24’s call for a doubling of IMF members’ quotas, which determines their voting power in the Fund, mirrored a speech by IMF Managing Director Dominique Strauss-Kahn on Friday in which he called for a further increase in IMF resources that would allow it to become a “credible” global lender of last resort.
The IMF received a $500 billion boost in its resources in April but emerging market countries China, Brazil and Russia have made it clear their contribution is not permanent unless they are given a greater say in the institution and also in how the funds are used.
Amar Bhattacharya, director of the G24 Secretariat, said more resources for the IMF would also discourage nations from trying to self-insure by accumulating large currency reserves.
Asian countries have been wary of the IMF’s handling of the region’s financial crisis in the 1990’s and have amassed trillions of dollars in savings to avoid ever going back to the IMF.
The G24 also said the threat of a deep and prolonged global recession appears to be receding. But it noted the crisis had exacted a heavy toll on developing countries and called on the IMF to pay closer attention to advanced economies, which were at the center of the crisis and have often ignored the Fund’s advice.
“In this connection surveillance of systemically important countries should be even handed and more effective,” G24 chairman Adib Mayaleh, who is also Syria’s central bank governor.
The G24 also called for an expanded role for IMF Special Drawing Rights, the fund’s internal unit of account, in the international monetary system.
Reporting by Lesley Wroughton; Editing by Ruth Pitchford