At the Annual Meetings South African Finance Minister, Trevor Manuel, demanded a more powerful voice for developing countries. “We must ensure that we [developing countries] can exercise ownership in a manner far beyond out outdated formulae which currently govern quota distribution.”
“Developing countries need a greater voice in providing strategic direction to the Bretton Woods Institutions to ensure greater effectiveness and credibility,” he said. African governments would like to see their voting rights enhanced to reflect their numbers. Currently 43 African countries are represented by only two Executive Directors.
However, there has been very little public debate about enhancing the involvement of the poorer developing countries in the governance structures nor has the recent “Cooper” Report, which reviewed the IMF‘s quota formula, encouraged further debate. In fact its proposals, if implemented, would increase the voting power of the US and decrease that of the Africans. IMF Managing Director, Horst Köhler, has said that he will set up a work programme to address quota issues but he wants it to go “beyond voting reform”.
The Executive Board has agreed to add one extra advisor to each multi-country delegation to the IMF Board. Increasing staff by only one person is not, however, likely to significantly increase the capacity of the African EDs to better represent the many countries in their constituencies or to engage more effectively in policy debates.
Also missing from the discussions were proposals to reform the process for appointing the Managing Director. A committee was established in July to address this issue (See Bretton Woods Update 17). The International Monetary and Finance Committee discussed the committee’s progress but no mention was made in its communique. African IMF ED Jose Pedro de Morais said that developing countries want to keep the debate high on the agenda of the International Monetary and Finance Committee.
It appears that the committee has been instructed to steer away from the politically sensitive issue of allowing non-Europeans to take the IMF‘s top post. If a compromise is reached, it is likely that it will be to allow IMF members from other regions to more clearly express their preference amongst European candidates. The IMF may opt for a selection committee.
Oxford academic Ngaire Wood commented in a recent article in Prospect magazine “The United States effectively killed the issue some time before the Annual Meetings by letting it be known that it would not open up the top job at the World Bank to any genuine election. The onus is now on these governments to explain how this squares with their commitment to greater accountability and transparency in international organizations”.
A new briefing by the Bretton Woods Project, A Structural Adjustment Programme for the IMF, examines the case for reforming the IMF‘s governance structures and suggests ways to do so. It proposes measures to improve the accountability of the Board and the IMF staff and management and calls for measures to formalize civil society participation.
ngaire.woods@university-college.oxford.ac.uk
“If the World Bank and IMF give Kenya money, this will be for the reasons of the international community and not for the sake of Kenyans. And in the process, these institutions will have given Moi’s dictatorship a blood transfusion”
Judge Aaron Ringera, Head of the Kenya Anti-Corruption Authority (KACA)
