Mavi Boncuk
After a two-day meeting in Gyeongju, South Korea, the finance ministers and central bankers took another step in the effort to bridge the diverging priorities of the leading economies. They will meet again next month in Seoul.
The intense talks yielded some consensus such as changes to how the I.M.F. is run. The G-20 agreed to transfer more than 6 percent of voting power within the I.M.F. to “dynamic emerging-market and developing countries” like Brazil and India by the fall of 2012. China will become the fund’s third-largest shareholder, behind the United States and Japan but ahead of Germany, France and Britain. Europe agreed to surrender two seats on the 24-member executive board.
As part of a package deal, the G-20 also agreed to double the I.M.F.’s quotas [1], which determine how much each country contributes to — and may borrow from — the institution. The quotas presently total about $340 billion.
Meanwhile, attending the IMF-World Bank Annual Meetings in Washington earlier in October 2010, the Undersecretary of Turkish Treasury İbrahim Çanakçı said “There is wide agreement in the IMF on Turkey's candidacy. Both the United States and European Union want Turkey to be represented at the IMF," adding that “Turkey's success story in recent years has been discussed and appreciated, Turkey and its representatives are listened to more carefully as compared to past years. International investors with whom we spoke expressed that they wished to increase their investments in Turkey.”
[1] On April 28, 2008, a large-scale quota and voice reform in the making for nearly two years was adopted by a large margin by the Board of Governors of the IMF. It aims to make quotas more responsive to economic realities by increasing the representation of fast-growing economies and at the same time giving low-income countries more say in the IMF's decision making. The reform builds on an initial step agreed by the IMF's membership in September 2006 to have ad hoc quota increases for four countries—China, Korea, Mexico, and Turkey.
When a country joins the IMF, it is assigned an initial quota in the same range as the quotas of existing members that are broadly comparable in economic size and characteristics. The IMF uses a quota formula to guide the assessment of a member's relative position.
The newly agreed quota formula is a weighted average of GDP (weight of 50 percent), openness (30 percent), economic variability (15 percent), and international reserves (5 percent). For this purpose, GDP is measured as a blend of GDP based on market exchange rates (weight of 60 percent) and on PPP exchange rates (40 percent). The formula also includes a “compression factor” that reduces the dispersion in calculated quota shares across members.
Quotas are denominated in Special Drawing Rights (SDRs), the IMF’s unit of account. The largest member of the IMF is the United States, with a quota of SDR 37.1 billion (about $56 billion).
LINK:Turkey - Central Bank of the Republic of Turkey - Türkiye Cumhuriyet Merkez Bankasi
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