6-Nov-2010

The International Monetary Fund (IMF) has agreed to boost the voting power of big emerging economies in what is being perceived as a historic decision by the international authority. China has been granted the third leading voice at the IMF. This decision marks the biggest ever shift in influence in favor of emerging markets and developing countries in order to recognize their growing influence and role in the global economy. As decided by the IMF, 6% of the voting shares will be transferred to emerging market countries from the hands of industrial economies.

China would overleap Germany, France, and Britain, to reach the third spot behind the United States and Japan. India, Brazil, and Russia would also be lifted up into the top 10 of the 187-member institution. The IMF's decision would lead to a major overhaul of the global economic order established when the IMF was set up after the Second World War.

Tensions between the United States and China have flared this year over business and trade, especially over currency under-valuations by China, which, according to Washington is giving Beijing, an unfair trade advantage. According to some analysts, unless China allows its currency to appreciate significantly, the present US administration may wait to submit the IMF vote change to Congress for approval.

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