The International Monetary Fund said on Thursday that its board of governors had approved reforms that will shift more voting power to emerging-market countries like China.
It will result in a shift of more than six percent of quota shares to dynamic emerging market and developing countries and more than six percent from over-represented to under-represented countries, the IMF said in a statement.
Voting share in the global lender is important because it gives countries a chance to influence decisions about how money, raised through subscriptions from IMF members, is used.
The IMF said the 10 IMF members with the largest voting share in future will be the United States, Japan, the key emerging-market powers of China, Brazil, India and Russia as well as France, Germany, Italy and Britain.
By giving more voting power to countries like China and other emerging powers, this reform will result in a Fund that better reflects realities, the IMF said.
Developed countries have stepped up efforts to have countries like China accept greater responsibility in global councils like the IMF while Beijing has chafed at contributing more unless its rising economic heft is recognized.
Emerging economies already have gained more clout in the IMF over the past five years, but the shift in voting power effectively amounts to a major overhaul of the global economic order established when the IMF was set up after World War Two.
The IMF said the changes will strengthen the lending institution's legitimacy and effectiveness. The changes also double IMF member quotas, or subscriptions, boosting the lender's resources by about $733.9 billion at current exchange rates, the fund said.
The next step is for member countries to accept the proposed quota increases -- which in some cases will require parliamentary approval. The IMF said its members will make best efforts to complete this by October 2012.
I urge all our members to proceed rapidly with the steps required to implement this package within the agreed timeline, IMF Managing Director Dominique Strauss-Kahn said.
(Reporting by Glenn Somerville, Editing by Kazunori Takada)