IMF Counters Claims of Western Dominance With Promise to Give Poor More Votes

The International Monetary Fund yesterday sought to respond to anger in developing countries at the institution's dominance by rich western nations by promising an increase in voting rights for the world's poorest nations.

Admitting that the IMF had to "address the issue of its own legitimacy", its outgoing managing director, Rodrigo de Rato, said the package of reforms would go beyond the deal struck in Singapore a year ago. He said that the changes would see a shift in power to the bigger emerging countries while an increase in the basic votes - the votes that each of the fund's members have regardless of their size would ensure that the least developed nations did not lose out.

In Singapore it was agreed that the basic votes would need to be more than doubled, but the IMF's managing director said yesterday the increase would now need to be bigger.

With President Luiz Inácio da Silva of Brazil floating the idea this week that developing countries should set up their own alternatives to the IMF and World Bank, Britain's chancellor Alistair Darling will call this weekend for basic votes for poor countries to be tripled.

Mr de Rato, who will be replaced at the IMF by Dominique Strauss-Kahn next month, said: "We need to enhance our legitimacy and we are doing so. This is a marathon not a sprint but we will meet the goal of updating our governance structures by this time next year."

Aid agencies said, however, that the reforms needed to go much further.

Elizabeth Stuart, senior policy adviser for Oxfam International, said: "The outgoing managing director has failed to deliver on promised reform. He has not made the radical changes that the IMF sorely needs, while the changes that are currently being negotiated have been led by a few governments, leaving many poor countries disappointed and left out."

Ms Stuart said that even quadrupling the basic vote would not mean any effective increase in the say that the poorest countries have over the running of the IMF, which has been controlled by the US and Europe since it was founded in 1944.

Mr Darling will use his first visit as chancellor to the annual meetings of the Bank and fund to say that the developed world has an obligation to go further than the Singapore agreement in boosting the voice of poor nations. He will also be calling for improvements in international financial transparency in the wake of the recent market turmoil.