An agreement to boost the voting power of emerging nations in the International Monetary Fund is just the start of a difficult process, the IMF's head said on Wednesday, as the World Bank signaled it was ready to go the same route.
Wrapping up meetings of the IMF and World Bank in Singapore, IMF Managing Director Rodrigo Rato recognized that the next stage would be more challenging, with richer countries worried they would lose influence and developing nations pushing for more.
Ministers voted this week to boost the voting power of China, South Korea, Mexico and Turkey. A second, more politically charged, set of broader reforms will follow by 2008.
While the plan won overwhelming backing, 23 member countries, mainly from Latin America and the Middle East, voted against.
Argentina, Brazil, India, Egypt and Iran were among the dissenters, arguing that the initial changes did not go far enough to reflect a shift in global economic power away from the rich countries that founded the fund in 1945.
The Group of Seven industrial nations alone, the United States, Japan, Germany, Britain, France, Italy and Canada, wield 45 percent of the fund's quotas, or membership subscriptions, which largely determine voting power.
Rato insisted that reforms would be taken further.
I certainly agree with those who think that what lies ahead is very challenging but at the same time very needed, Rato told finance ministers and central bankers at the end of the meetings.
The vote doesn't end the process of making quotas more responsive to the world economy but it opens and begins a very important process, he added.
Rato said he would personally reach out to all members to ensure the next stage gets the necessary consensus.
There is clear there are a lot of challenges ahead of us ... but I think there is a will to understand that multilateralism is at the heart of our efforts in responding to your needs, he said.
At the IMF's sister organization, World Bank President Paul Wolfowitz said the bank would pursue changes to its own governance structures, where the United States and Europe also have a dominant role.
Rodrigo, you have accomplished it, I congratulate you, Wolfowitz said. Fair weight and voice to all member countries is essential for our credibility and effectiveness and we recognize we can and must do more.
You have set an example for us on the bank's side and we intended to follow your example, Wolfowitz said.