China urges IMF reform to reflect position of members

WASHINGTON—The International Monetary Fund’s quota and voice reform should reflect the relative position of its members in the world economy, a senior Chinese official stressed here Monday.
That means “the reform should aim at significantly raising the overall quota shares of developing countries, particularly emerging market economies, and strengthening the voice of the low income countries in the Fund,” Li Yong, China’s vice finance minister, said at the World Bank/IMF annual meeting.
Meanwhile, the voice and participation of the developing and transition countries in the decision-making process of the World Bank should be strengthened, he said. The increasing contribution of the developing countries to the world economic growth should be duly reflected in the voice and representation in the decision-making of the two international institutions, Li pointed out.
The vice minister also said that the two institutions should sharpen their comparative advantages of global nature and guide the economic globalization towards the right direction. They should promote effective participation of the developing countries in the setting of the international economic rules, facilitate orderly flows of capital, technology and labor, reform the international monetary and financial regimes, support South-South cooperation and regional cooperation so as to create a stable and development friendly global economic environment, he said.
At the same time, Li stressed that the Fund should enhance its surveillance over countries issuing major reserve currencies so as to play an effective role in promoting financial stability and economic prosperity. “We regret that the Fund adopted in June the Decision on Bilateral Surveillance over Members’ Policies in the absence of consensus among its members,” he said. The Fund should adhere to its consensus-based approach in adopting major resolutions, said the vice minister.
“We also believe that the Fund’s exchange rate surveillance should focus on whether a member country’s exchange rate regime is consistent with its medium term macroeconomic policies, rather than on the level of the exchange rate,” he said.—Xinhua