Former South African finance minister Trevor Manuel has
denounced the IMFs 24-member executive board for
obstructing reform, and suggested it could be broken up.
Manuel, chair of the Committee of Eminent Persons on IMF
Governance Reform, told Emerging Markets in an
interview: There is a fundamental flaw in the approach to
institutional reform that people [on the board]
dont give up what they have. They will resist any
idea that they are so unimportant that their task can be
In the argument now raging about the board being
restructured, the US has called for the number of directors to
be cut to 20, while the UK and France are resisting pressure to
give up their seats.
Manuels committee has recommended lowering the
proportion of votes needed to pass key issues from 85% to 70%
which would get rid of the effective veto of the US,
which has a 17% voting share.
Manuel also repeated calls for greater representation by
developing countries. You have a maldistribution of
chairs. You want constituency-based systems, but need to
reorder the chairs. ... Thats the impasse.
Manuel, however, played down the risk of countries breaking
out to find alternative sources of funding. If you were
talking in times of abundant capital, it may have been an
issue, but you dont have such an abundance now, he
China, with its large currency reserves, could offer an
alternative, but was unlikely to do so, he said. China, the
largest borrower from the World Bank, is a smart player.
They wouldnt want to isolate themselves.
But we have to battle at finding a more appropriate
system of governance and representation than you have at the
In Istanbul, the G24 group of developing nations has issued
a communique voicing its support for correcting the
unfair distribution of quotas and voting power, by a
shift of 7% in aggregate voting shares to developing
Amar Bhattacharya, director of the G24 secretariat, told a
press briefing it should be clear that the shift
was from developed to developing countries
reflecting the groups rejection of the notion, favoured
by European Union, that the shift should be seen as one from
over-represented to under-represented countries.
The group also urged that the next quota review, to be
completed by January 2011, should at least double the
size of overall quotas, meaning a doubling of the
resources available to the IMF.
Adib Mayaleh, G24 chairman and governor of the Syrian
Central Bank, told the briefing that developing countries were
paying a very high price in a substantial slowdown of
growth and that, given a continuing threat of
unemployment, should continue with counter-cyclical
measures until a strong recovery has been achieved.
The communique argued that the extra $750 billion made
available to the IMF over the past year should be seen as
a bridge to a permanent expansion in the IMFs
resources through a general quota increase.
As with the IMF, the group demanded a redressing a
democratic deficit in the World Bank, advocating a
shift of 6% in the voting power from developed to
developing and transition countries. This should be done
without involuntary dilution of the shares of individual