A t the end of the International Monetary Fund’s annual meetings in Singapore, reform was voted through that provided for ad hoc quota increases for a group of the most under-represented countries – China, Korea, Mexico and Turkey. It committed to a new, simpler and more transparent quota formula to capture members’ relative positions in the world economy, to be ready in time for the next annual meetings in 2007.
That the balance of global economic power is shifting is self-evident, and there are many good reasons why the IMF, other multilateral institutions and even the Group of Seven should be overhauled to reflect this. But agreeing on reforms is far from easy and in Singapore, emerging titans such at Brazil and India were aggrieved to miss out on the first round of quota increases.
African countries, while not having the same economic clout, also feel their needs are not being met. Sub-Saharan Africa accounts for just 1.4% of global economic output, and its share has been steadily declining from about 2.5% in 1980. In the IMF, despite accounting for almost one-third of the membership, African countries have little more than 2% of quotas.
But in many ways, Africa’s needs are the greatest. In terms of the Millennium Development Goals to halve poverty, Africa is the furthest behind and has been the slowest to improve.
It is tempting to think Africa should be a lower-order agenda item for the IMF, especially given that the fund is tasked primarily with global financial stability. What possible risk does Africa pose to that stability? But the fund cannot preach globalisation and then ignore the plight of Africa.
The long-standing African view is that for the IMF to be effective on the continent, Africans must have a greater say in the prescriptions given by the IMF – not least implying more Africans in Washington to explain the practical realities on the continent. This makes sense, given how often in the past the IMF’s non-African staffers have failed to understand the continent properly.
Africa lacks the reform momentum that exists in other developing regions and the IMF could be far more influential nudging the continent in the right direction – if it recognises that it must enhance its legitimacy.
