The International Monetary Fund (IMF) is both very powerful and deeply undemocratic. It has been dominated by a small group of rich countries and usually run by a European. All this was perhaps understandable when IMF was set up in 1944 — when Asia, Latin America and Africa were minnows in the global seas. But much has changed since then.
So, it is good to see that the member states of IMF have overwhelmingly voted to increase the quotas and voting rights of emerging market economies to take their growing economic clout into account, though some such as Russia and Saudi Arabia have lost out. This is part of a larger attempt to redefine the fund, which finds its relevance withering away because of the growth in private capital flows and massive forex reserves in most emerging markets.
At a media briefing that has been transcribed for the IMF website, senior officials there suggest that these “quota and voice reforms” are a first step. More could follow. That’s good news.