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Rich countries to relinquish voting power at IMF

Text by NEWS WIRES

Latest update : 2009-09-25

The Group of 20 nations gathering in the city of Pittsburgh have agreed on a five percentage point shift in International Monetary Fund voting power from richer countries to emerging economies, EU officials say.

AFP - Leaders of the Group of 20 major economies are to make a "very important" decision on giving emerging economies greater clout in the International Monetary Fund, a Chinese central bank official said Thursday.

"We think the core of the reform of IFIs (international financial institutions) is emerging markets. Developing countries are under represented in these institutions," said Xie Duo, a director general in the People's Bank of China, said on the sidelines of the G20 summit in Pittsburgh.

"We believe that at tomorrow's summit a very important political decision will be made on this matter," he said. The summits ends Friday.

The leaders of the G20 representing developing and industrialized nations had earlier pledged to work for a comprehensive IMF reform that would address imbalances in voting power in the Washington based fund.

China, with its current 3.7 percent of the vote, has less clout than France, at 4.9 percent, although the Asian giant's economy is one and a half times the size, according to IMF data.

Brazil, Latin America's powerhouse, carries 1.4 percent of the voting power, while Belgium haas 2.1 percent, with an economy one-third smaller.

While the general idea of rebalancing has support, differences remain over how to achieve it and horse trading is expected to continue on Friday when the leaders will hold a day of meetings.

Date created : 2009-09-25