The October 2007 Communiqué of the IMFC stressed the critical importance of the implementation of the program of quota and voice reforms adopted by the Board of Governors in Singapore and called on the Executive Board to continue its work in order to allow agreement on all elements of the package by Spring 2008. I am pleased to report that on March 28, 2008, following extensive discussions, the Executive Board recommended the adoption by the Board of Governors of an important package of quota and voice reforms (see the Executive Board’s report to Governors, attached). On the same day, the Executive Board’s recommendation was sent to the Board of Governors, with the voting period running through 6:00 p.m., Washington time, April 28, 2008. This agreement has been achieved in a spirit of compromise and provides an important demonstration of the membership’s commitment to the Fund’s future by enhancing its effectiveness, credibility, and legitimacy.
These reforms represent a major step forward in modernizing the IMF and achieve the objectives set out in Singapore in 2006: (i) to better align quota shares with members’ relative weight in the world economy and to make quotas and voting shares more responsive to future changes in economic realities, and (ii) to enhance the voice and participation of low-income countries. The package includes a simpler and more transparent quota formula; increased representation for dynamic economies; a tripling of basic votes to increase the voice of low-income countries and a mechanism to maintain the share of basic votes in total votes going forward; and an additional Alternate Executive Director for the two chairs representing large African constituencies. The reform is also forward-looking and dynamic, envisaging realignments of quota shares every five years to make further progress in closing the gap between calculated and actual quota shares and to reflect developments in the world economy. Therefore, while the immediate actions are important, they are by no means the end of the process.