MercoPress. South Atlantic News Agency

IMF begins biggest shake up in six decades

The International Monetary Fund, IMF, is scheduled to begin addressing Monday “the biggest shake up in six decades” of the multilateral organization, according to Britain's Chancellor of the Exchequer Gordon Brown who chairs the top steering committee.

"The new challenges demand IMF to keep up with the same rhythm achieved by the world's economies, mainly from emerging countries", said Brown

IMF created in the early nineteen forties thinking in the reconstruction of the global economy following World War II does not have a "one member one vote", constitution but rather voting power is linked to economic criteria. IMF 184 members will be voting on a proposal to change voting, which could immediately increase the votes of China, South Korea, Turkey and Mexico.

IMF Managing Director Rodrigo Rato who made the official presentation of the mid term reform proposal said discussions have shown us that "we're on the right track".

"We welcome the agreement to a comprehensive reform package for voting quotas which if moved forward, we want to be completed no later than the 2008 annual meeting", said Brown who insisted the reforms agreed "should also enhance the participation and voice of low income countries"

IMF 24 strong International Monetary and Financial Committee chaired by Brown is meeting in Singapore and needs to win 85% of votes to pass, which is expected to take place Monday afternoon.

"This first step", as Mr Rato has called the reform project is the immediate recalculation of the votes allocated to China, South Korea, Turkey and Mexico. A second stage would be a review of how votes are calculated with further changes based on some new formula.

However not all emerging countries are behind the proposals with Argentina and Brazil waiting to see their voting share increased quickly too, and India believes IMF should overhaul the system in one step, not in the proposed two steps which are being voted now.

Nevertheless Brown and Rato believe the resolution will be approved Monday, since delegates to the committee, Finance ministers and Central Bank presidents, have supported reforms although they don't necessarily agree with the procedure or timetable. Furthermore dissenting countries don't have the necessary 15% of votes needed to block the initiative.

The US vote at IMF counts for about 17% of the total, Japan has 6.1%, Argentina 0.99% and Swaziland 0.03%.

Brazil's Finance Minister Guido Mantega said that his country and a majority of South America voted against the reform proposal and added that if it finally passes, "IMF would undermine its legitimacy".

But the final release approved unanimously by the Committee, of which Brazil and Argentina are members, said that the reform package once implemented "will represent a significant progress for member states' quotas according to their relative position in the world economy".