Korea one up in IMF voting power

By Kim Da-ye

Korea became the International Monetary Fund (IMF)’s 18th largest contributor as the organization’s quota reforms, agreed on in 2008, took effect Thursday.

Korea moved up one notch in the rankings as its quota increased from 1.35 to 1.41 percent.

A member’s quota represents the maximum amount of money that a member country gives to the fund, which is lent to those in need.

The quota also determines voting power in IMF’s decisions as well as the amount of financing it can obtain from the organization.

The U.S. maintained its top position with the quota increasing from 17.08 percent to 17.67 percent, followed by Japan with 6.56 percent and Germany with 6.11 percent.

China remained as the sixth largest contributor with its quota rising from 3.72 percent to 4 percent. India climbed up two spots to 11th with 2.44 percent.

The organization of 187 countries said in 2008 that the amendment was made to enhance the participation and voice of emerging market and low income countries belonging to the Fund.

Korea and other emerging economies are expected to see their rankings rise further, once their 2010 agreement goes into effect.

IMF Managing Director Dominique Strauss-Kahn Thursday called for speedy ratification of the 2010 amendment agreed at the G20 Seoul Summit in November 2010 in order to implement the quota increase that better represents global economic realities.

Once the 2010 reform agreement takes effect, South Korea’s quota will increase from 1.41 percent to 1.8 percent, causing the country moving up two places to 16th.

China will see a whopping 2.39 percentage-point increase to 6.39 percent and become the third most powerful voice at the IMF.

The majority of developed nations including the U.S., Japan, Germany, the U.K, and France will have their shares reduced, while India will rise to the eighth largest contribution and Brazil to 10th.

“This will represent the most fundamental governance overhaul in the IMF’s 65-year history and the biggest-ever shift of influence in favor of emerging markets and developing countries,” Strauss-Khan said.

The current quota is a weighted average of gross domestic product, openness, economic variability and forex reserves, the IMF said.