Thursday, September 14 2006 11:57 Hrs (IST) - World Time -

Colombo: Dubbing the quota formula of the International Monetary Fund as 'hopelessly flawed,' India yesterday (Sept 13, 2006) asked the agency to restructure voting powers of member countries, even as it sought a greater say for developing nations in such institutions.

India has always held that the developing world deserves to have much greater 'voice' in the management of global financial institutions, Finance Minister P Chidambaram said at a meeting of finance ministers of commonwealth nations.

Many countries find the present quota structure as skewed in favour of US and Europe and India is opposed to IMF's plans for ad-hoc redistribution of quotas to China, South Korea, Mexico and Turkey at its annual meeting in Singapore on September 19-20.



A member's quota delineates basic aspects of its financial and organisational relationship with the IMF, including voting powers and access to finance.

"It is widely believed that the present quota formula of the IMF is hopelessly flawed. Obviously an ad-hoc quota redistribution based on this flawed formula cannot provide a durable solution," Chidambaram said, seeking a new formula for arriving at voting powers of member countries.

He said participation in the management of both IMF and World Bank has to undergo a change to reflect the current global realities more accurately.



"This is something, all developing economies strongly endorse, and I urge you to join me in Singapore to articulate our united view on this matter," the Finance Minister said.

Chidambaram said the relevance of IMF and the World Bank would eventually be determined by their ability to play a meaningful role in meeting the increasing aspirations of the vast majority of the people for freedom from hunger and for the bare necessities of health and education.