Finance ministers from the Group of Seven industrial nations are poised to push for a redistribution of voting power within the International Monetary Fund when they assemble in Japan next week, an international financial source said Friday.
They will probably mention in a report to be submitted to their leaders their mutual wish to have voting in the Washington-based IMF better reflect the rising economic power of Asia, the source said.
Senior officials from the G7 — Britain, Canada, France, Germany, Italy, Japan and the United States — are reportedly discussing the exact wording of the report that will deal with IMF voting and other reforms to the global financial system.
The envisaged call for the reassessment of the IMF’s quota distribution, voting rights and representation on its board is one of Japan’s initiatives as host of this year’s Group of Eight summit.
The quotas, which Japan wants redistributed as swiftly as possible, is a pool of resources consisting of the capital subscriptions paid by each member nation. The quotas determine representation on the 24-member Executive Board.
The IMF’s 183 member countries are grouped into 24 constituencies, with five of them represented by a single nation on the board and the remainder by groups of countries. Europe now has a combined 37 percent of the votes and the U.S. 17 percent. Japan holds 6 percent and other parts of Asia a combined 11 percent.
Japan has repeatedly said the voting share and board representation of Asian states is too small and should be expanded to reflect their economic advancement over the past two decades.
“Japan considers that a review of the IMF quota shares and the composition of its Board of Directors is crucial for the improved governance and accountability of the IMF,” Vice Finance Minister for International Affairs Haruhiko Kuroda said last week.
The international financial source said the G7 finance ministers will call for the redistribution of IMF voting power in a carefully worded manner, in consideration of anticipated resistance from small European nations.