The IMF is developing its 15th General Review of Quotas, after the US Congress failed to authorise the previous IMF quota and governance reform until 2015, after it was initially agreed in 2010 (see Observer Winter 2016).
The quota review is designed to take place every five years with the stated aim of addressing the distribution of shareholding power among member states. The formula currently used to guide the distribution of quotas is calculated in accordance to GDP (50 per cent), economic openness (30 per cent), economic variability (15 per cent) and international reserves (5 per cent). However, the IMF has stipulated that a new quota formula is being discussed in the context of the 15th General Review of Quotas.
While the 2010 reforms shifted 6.2 per cent of quota shares towards poorer countries, they fell significantly short of civil society calls for a voting system that moved away from the unequal weighting that prioritises wealth over democracy, fueling a sense of disenfranchisement.
Dr Fanwell Kenala Bokosi, executive director at Afrodad, the African forum and network on debt and development, said, “Seventy three years after its establishement, the IMF quota system still reflects the colonial mentality that prevailed at its establishment. While the world has moved on, the IMF quota system has the most glaring over-representation of European economies, and in particular that of the euro-area economies with the US playing the same big boy role of the 1940s. How can one possibly justify this nontransparent and undemocratic system that ignores, actively excludes and weakens the voices of the majority of its clients in 2018?”
Indeed, the pressure on the IMF to complete the review and address the democratic deficit is mounting, as the G24 stressed in its communique at the World Bank and IMF Annual Meetings in October its concern with the delayed process, and called on the IMF and World Bank to “strengthen their efforts toward addressing the severe under-representation of some regions and countries, including at the managerial levels” (see Dispatch Autumn 2018).