Brazil’s Finance Minister Guido Mantega urged International Monetary Fund members to grant emerging markets a greater say in management of the lender, saying that the overrepresentation of some European countries no longer reflects the balance of global economic power.
Mantega, in a speech that will be delivered tomorrow at the IMF meetings in Washington, calls for implementation of a 2010 reform of the quota shares, which determine a nation’s strength within the fund, to better reflect the changing balance of the world economy in favor of nations like Brazil, Russia, India and China -- the so-called BRIC nations.
“Brazil’s economy is larger than that of any European country but Germany and France,” Mantega said, according to the text of his speech distributed in advance. “Yet, Brazil’s calculated quota share is equivalent to that of the Netherlands and smaller than those of Spain, Italy and the United Kingdom.”
Earlier today, Mantega said that Brazil would insist on emerging markets having a greater voice in the institution as a condition to joining an international effort to increase the fund’s resources by more than $400 billion.
He urged quotas to be calculated based on the gross domestic product of members, instead of a formula that takes into account the openness of their economies.
“The quota of Spain, amazing as it may seem, is larger than the sum total of the quotas of all forty-four Sub-Saharan African countries,” Mantega said. “These and other anomalies are a product” of the current formula.
Source: Bloomberg