IMF remake faces setbacks
Korea's drive to secure a greater say in the running of the International Monetary Fund may have stalled in the face of opposition from some developing member states and a lukewarm response from major voters.
The IMF plans to reshape its voting shares in a bid to give a greater role to Korea, China, Turkey and Mexico at its Sept. 19-20 annual meetings in Singapore.
The redistribution of voting power comes amid the fast-growing economic influence of these four member economies over the previous decades. While Korea accounts for around 1.6 percent of the total global output, the country has only a 0.76 percent stake in the IMF.
Each of the IMF's 184 members gets 250 basic votes, but influence is measured in quota votes, which are distributed according to each country's strength in the global economy.
The other three peers have also showed discontent over a disproportionately small quota compared to their greater economic influence in the global economy.
Member countries will vote in Singapore to overhaul the fund's outdated voting structures.
Korea will see its voting right nearly double to 1.35 percent if the plan is approved by member states.
The expanded quota more accurately represents the actual portion of Asia's third largest economy in the world.
The IMF's 24-member executive board had already approved the proposal last month, but large emerging economies such as Brazil, Argentina and India are objecting to the reform plan, fearing that their shares will shrink.
They also argue that they too deserve increased voting rights.
"We are making a full-scale effort. But we cannot be sure of the voting result due to many opposing countries," Korea's Finance Minister Kwon O-kyu said in a recent press conference.
At least 85 percent of voting shares should say yes to the reform scheme for the approval.
Such a high threshold means that Korea needs supports from major members such as the United States and European countries and other developing states as well.
This prompted Korea to step up efforts to gain more support from members with small shares in Africa, Asia and South America.
Another stumbling block is the European Union.
The biggest voter with over a quarter of total quota has backed the IMF's plan but demanded it should be treated equally in any radical revamp.
This means that the European states could revoke their support for the voting restructuring, if their IMF quotas seem to be threatened by the plan.
The rising tensions between Washington and Beijing over the trade imbalances are likely to further complicate the reform plan.
The U.S. government is currently pressing for China to give more flexibility to its currency, which it believes would help reduce its huge trade deficits.
"We do expect that leaders in an institution play a leadership role," said Tony Fratto, spokesperson for the U.S. Treasury Department on Tuesday.
His remarks imply that Beijing should make further efforts to revalue the yuan for a bigger voting right in the IMF.
By Ko Kyoung-tae