SINGAPORE: The board of governors of the International Monetary Fund (IMF) endorsed here on Monday a package of organisational governance reform by a landslide 90.6 per cent of "the total voting power."

India, which led a dissenting campaign, failed to stop the IMF in the first stage of its first major reform exercise 60 years since its inception. India and its supporters were able to muster only 9.4 per cent of the votes in trying to get the "flawed" reform plan stalled.

China will be among the immediate beneficiaries, with its "voting power" surging to 3.72 per cent from 2.98. Beijing's quota, which stands at 6,369.2 million Special Drawing Rights (SDRs) at present, will now jump to 8,090.1 million SDRs.

India's "voting power" will slide to 1.91 per cent from 1.95, while its quota will remain stable at 4,158.2 million SDRs. A top Indian official told The Hindu that "we have not lost the argument" although the vote was lost.

The United States, which commanded the largest "voting power" of 17.40 per cent so far, will now have to settle for 17.10 per cent, by far the lion's share of the cake still, under the first-stage of reforms. The U.S. quota will remain at 37,149.3 million SDRs despite the fall in its "voting power."

The initial phase provides for ad hoc quota increases in respect of the vastly under-represented emerging economies and also suitably weighted "voting power" for them and others in the IMF's decision-making process.

Three objectives

In commending the "two-year reform programme," IMF managing director Rodrigo de Rato outlined three objectives: a fair deal for the under-represented emerging economies, a greater voice for the low-income countries, and a gradual realignment of the balance of power within the organisation in tune with the "weight" of the members in the global economy.

India was joined by Brazil, Argentina and Egypt in a concerted campaign against the reform plan. Their main argument was that the "non-linear plan" was likely to bring about new imbalances within the IMF's power structure.

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