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Contributions from
the Column
Facts and trends
BMZ proposal for reforming voting rights at the World Bank
How fast the world population
After Cancún: future of G21 uncertain
Building democracies from outside takes a long time
Development Policy Media Prizes 2003
EU Commission to integrate development fund in the EU budget
Negotiations between EU and ACP states
SPD Forum: 'One World starts at home
New framework for GTZ projects: “Impact and objectives are crucial”
11/2003
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[ World Bank and IMF annuals meetings ]
BMZ proposal for reforming voting rights at the World Bank
At the annual meetings of the World Bank and IMF in Dubai at the end of September, Germany's Development Minister Heidemarie Wieczorek-Zeul spoke in favour of reforming the World Bank's decision-making and voting structures. The proposal aims at giving developing countries a greater voice within the Bank. The main issue on the conference agenda, however, was the conflict over the exchange rate of the Chinese renminbi.
In the joint Development Committee of the IMF and World Bank, Wieczorek-Zeul presented a position paper proposing that the basic votes allocated to countries – all of which receive the same number – should be increased to a good ten percent of the total votes within the Bank's Board of Directors. This would reduce the weight of those votes depending on member countries’ capital shares and boost the total votes share of the (financially weak) developing countries – according to BMZ calculations from an aggregate 40 to 43 percent. The paper also suggests introducing the principle of double majority voting for certain decisions. Resolutions at operative level would then require more than just a majority of shareholder votes, as at present; they would also need majority backing by the developing and transition countries. The Development Committee agreed to discuss these proposals at its next scheduled meeting in the spring. The anti-globalisation network Attac described the BMZ initiative as insufficient, saying that a three percent increase in votes for the developing countries will do nothing to change the fact that IMF and World Bank are “deeply undemocratic” institutions. The BMZ, however, points out that for the poorest countries, an increase in basic votes means much more relative voting power than the figures for the whole group of developing countries suggest.
The issue that dominated the autumn conference was the exchange rate of the Chinese renminbi. The United States accuses China of keeping the value of its currency artificially low by pegging the renminbi to the US dollar. This, it is claimed, is thwarting all attempts to reduce the United States' massive balance of payments deficit because Chinese products are accessing the US market at prices which undercut all competition. Even before the conference in Dubai, US Treasury Secretary John Snow tried unsuccessfully to pressure the Chinese government into untying the renminbi from the dollar and allowing it to rise. G7 finance ministers, at their meeting during the IMF/World Bank conference, also called indirectly on China to let its currency float. The final communiqué spoke of greater exchange rate flexibility being desirable. Here too, though, China's response was 'no'. According to a report in Süddeutsche Zeitung, China's stance in Dubai received a certain amount of support from IMF managing director Horst Köhler. The Fund boss also endorsed, in principle, the call for flexible exchange rates but, according to the German daily, he voiced criticism of the US government for its hard line on China. A “cooperative strategy”, he said, would be more sensible. (ell)
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