The International Monetary Fund's (IMF) executive board agreed on Thursday to a reform of its governance and quotas, giving up-and-coming developing countries greater power in the running of the fund.

"This two-year program of reforms will include initial ad hoc quota increases for four countries that are clearly under-represented China, South Korea, Mexico and Turkey," IMF Managing Director Rodrigo de Rato told a news conference.

"This will now be sent to the Board of Governors for their approval at Singapore," he said. The IMF and World Bank will hold their annual meetings on September 19-20 in Singapore.

The fund's quotas determine voting power and have a bearing on the amount members can borrow.

At present, Rato said, the quotas and voting shares of members do not adequately reflect the increasing global economic weight of major emerging market economies.

He said Asia is a prime example, accounting for about a quarter of the world's gross domestic product one-third higher than its share of fund quotas.

"The situation of some individual countries is even more out of line," Rato said. "China's gross domestic product (GDP) is one and a half times its share of fund quotas. South Korea's share in world GDP is twice its share in fund quotas."

"I therefore see a clear need for a rebalancing of quotas to reflect changed economic realities."

There will be a further ad hoc increase in quotas for a broader range of members, he said.

Issues to be discussed at the Singapore meeting include proposals for reform of the fund's governance structure and changes to the way it conducts macroeconomic surveillance, a core function of the institution, according to Rato.

(China Daily September 2, 2006)