IMF to Restrain and Reform Beijing’s Developing Power
By: Vasily A. Klimko
The progressive economic impact of China is obvious in the yearly conferences of the World Bank and the International Monetary Fund (IMF), held in Singapore. The said Asian country, along with other nations, will be granted with more votes by the member nations of the said global trade organization. Earning such votes, China is deemed to give more impact in the IMF activities. Moreover, members nations coming from the western hemisphere expressed that the votes that will be earned by Beijing should compel the said nation to be responsible especially with concerns dealing with global trade conditions.
The IMF-World Bank conferences that was formally commenced on September 19th was considered the greatest change for the institution since its founding in 1944. Members of the said organization voted to intensify the suffrage rights of growing countries like China. China’s intensified role in the IMF is a big change in the global trade since it breaks the dominance of Western countries in the IMF.
However, Beijing still ranks second to Belgium in terms of vote, even though the Asian country is dubbed as the third largest nation next to the US and Japan. The reform planned by the IMF will provide China a better role with global trade issues, and boosts its share of the votes. On the contrary, the IMF did not specify how much votes will China earn.
Aside from China, countries like Mexico, South Korea, and Turkey are also benefited from the changes in the IMF. Come year 2008, fast-growing nations like Brazil and India will also be given increased in the voting quota so they will have more control in the opening of the global trade.
Chancellor Gordon Brown of Britain announces prior to the voting that the said reform is planned to give developing nations a greater voice in the IMF. It must be noted that Brown have teamed up with Henry Paulson, US new Treasury Secretary, to advocate for the restart of the stalled Doha round of trade talks. He added that financial leaders who met in Singapore have an unanimous belief that the reforms about the voting quota in IMF will give important developments not only in the global trade but also within the international economy, thus, increasing the participation of other nations in the negotiating table.
Since last month, China has already been requesting for a bigger voice in the IMF since it has already given numerous contribution to the global trade. Economists said that the endeavor to give Asian nations a room in the IMF is also tantamount to including them in the economic system of the world.
Meanwhile, the Chinese nation is under pressure for producing loans to some nations whose debts were recently forgiven, and for hindering its yuen to have a progressive value, therefore increasing its advantage on the world trade.
Paulson, on other hand, have given warnings with rich countries’ lending activities. He said that such nations are providing financial help to poor nations without discussing the appropriate payment schemes. He emphasized that to thoroughly eliminate the imbalances in the global trade, efficient incentives and reprimands should be implied by the IMF. The Treasury Secretary also added that this system will possibly work if developing nations like China will become partners of Western states in the global trade.
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