IMF Inherently Unfair?

Do all nations have equal voice?

Published on October 21, 2006 By singrdave In World Trade Issues

Another great oversight in the supposedly democratic, fair, and even-handed liberal free trade environment is the IMF voting procedure. The IMF has doled out its voting privileges to each participant nation based on its donations to the IMF.

Unlike a democratic system in which each member country
would have an equal vote, rich countries dominate
decision-making in the IMF because voting power is
determined by the amount of money that each country
pays into the IMF's quota system. It's a system of one
dollar, one vote. The U.S. is the largest shareholder with a
quota of 18 percent. Germany, Japan, France, Great Britain,
and the US combined control about 38 percent. The
disproportionate amount of power held by wealthy countries
means that the interests of bankers, investors and
corporations from industrialized countries are put above
the needs of the world's poor majority ("Top Ten" 2005).

This is not just inflammatory rhetoric: the US possesses 371,743 votes, fully 16.85% of the voting power of the IMF, where poor blighted Vanuatu possesses a mere 420 votes (0.02% of total IMF voting power) ("IMF" 2006). Fair? Equitable?

Source:
"IMF Members' Quotas and Voting Power, and IMF Board of Governors." International Monetary Fund, 2006. Internet: IMF website, accessed 21 Oct 2006.
"Top Ten Reasons to Oppose the IMF." Global Exchange, 2005. Internet: Global Exchange website, accessed 21 Oct 2006.

Comments

cactoblasta

on Oct 21, 2006

Third world countries don't like the IMF either - they enforce laws on them that aren't forced on the first world. Indonesia's banking system was ruined by unwise IMF policy demands in the mid-90s.

You need to remember though that the IMF is not a liberal institution and has backing from both sides of American politics. It's a tool by which the US wields global influence and secures global markets for its protected goods. Unless you're one of those bleeding heart left-wingers who believes in magical pixies and outdated notions of justice I would have thought you'd be all for the IMF. After all, it exists to enforce your interests.

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