China, South Korea, Turkey and Mexico are expected to get a bigger say in the International Monetary Fund (IMF) with an increase to their quotas.

 

China, South Korea, Turkey and Mexico could win greater IMF shareholdings in a few days, IMF Managing Director Rodrigo Rato was quoted by the Financial Times as saying.

 

He said the agreement to launch a fundamental review of control and governance of the IMF was within sight, signaling the fund's most far-reaching reform since its foundation at the 1944 Bretton Woods conference.

 

The decision on the four countries' quotas will be made at the IMF's annual meeting next month in Singapore.

 

The meeting will aim to adjust the governance and role of the IMF to better reflect the significant shifts in global economic powers.

 

The US is pushing for a new IMF formula to determine a country's shareholding based primarily on gross domestic product (GDP). Such a formula would raise the relative shareholdings of Asian countries and emerging markets, mostly at the expense of small European nations.

 

China's GDP reported a 10.9 percent growth in the first half of this year, the highest in more than a decade.

 

According to Jason Chang, an economist with Standard Chartered, this move is within expectations since the four economies are galloping forward and taking a bigger share of the world economy.

 

"They should play a more important role in the IMF, in line with their economic and political status in the international arena now," Chang told China Daily.

 

The IMF is an organization of 184 countries working to foster global monetary cooperation, secure financial stability, facilitate international trade and reduce poverty.

 

The US, several EU states and Japan are currently the institution's largest shareholders. China's quota is less than the combined shareholding of Belgium and Holland.

 

"As China's economy becomes increasingly open, the country's say in the IMF will be more meaningful," Chang added.

 

In 2005, China's net export growth contributed more than 20 percent to the country's GDP growth, a key indicator of the opening up of the economy.

 

Most IMF member governments agreed that GDP and openness are the two key criteria to determine a country's quota.

 

(China Daily August 31, 2006)