IMF Governance Reform and the Board’s Effectiveness
Agreement on the need for a more representative and effective International Monetary Fund (IMF) positioned at the center of efforts to stabilize the global economy was a highlight of the G20 summit in Pittsburgh in September 2009. This was followed in December 2010 by what the IMF’s managing director referred to as ‘landmark’ reforms, including agreements by the IMF’s member countries to increase the voting power of emerging market and developing countries by 5.3 percentage points (this includes the impact of the ad hoc quota adjustments agreed in 2008) and to reduce the board representation of the advanced European countries by two chairs, while preserving the size of the board at 24 chairs. The changes require ratification by the IMF’s member governments, and this process could be completed by late 2012. Despite the changes the US will continue to retain veto power over those major decisions in the IMF that require a supermajority of 85 per cent, including those related to quotas, Special Drawing Rights (SDR) allocations and the admission of new members.