Boosting Korea's influence by taking more burdens Korea's quota to increase As the International Monetary Fund (IMF) board of directors decided to specifically increase the quota of four countries - Korea, China, Mexico and Turkey - on August 31 of this year, Korea is expected to see its right to speak augmented in the internal decision-making process of the IMF. In case that such a decision is reached, the relative importance of Korea's quota accounts among IMF's total quotas will be increased from its current value of 0.764% to 1.3466%. In conjunction with an increased quota amount, Director-General Kwon Tae-kyun of the International Finance Bureau, Ministry of Finance and Economy (MOFE) of the Republic of Korea notes: "Criticisms about the problem that current IMF quotas don't reflect member country's economic power in an orderly fashion have been brought forward ceaselessly." Since the IMF was established in 1945, the number of member countries has increased to 184. However, its 35 founding nations have significantly higher quotas than the others, and therefore these countries' influence on IMF policy remains very great. Kwon said: "For all that Asian countries' influence, especially Korea, upon the world economy and finance are continuously on the rise, the current IMF quota scale doesn't reflect such countries' economic growth." Korea involved in IMF control structure reform Under such a background, Kwon explains that Korea has been asserting the necessity of quota readjustment at important meetings in the meantime. For instance, Korea drew up the following joint statement by proposing the necessity of quota readjustment at the ASEAN+3 finance minister's meeting in May, 2005: "ASEAN+3 Finance Ministers agreed to call for an urgent review of the quota of the Asian countries and their relative positions in the World" Through a keynote speech at the IMF general assembly as well as International Monetary & Financial Committee (IMFC) also in September 2005, the Korean government delivered a strong message about quota readjustment: "While I welcome reform efforts from the IMF itself, I hope the reallocation of quotas will be carried out in the nearest future." (a keynote speech at IMF general assembly) "The Committee welcomes and supports the broad priorities set forth in the Managing Director's Report on the Fund's Medium-Term Strategy. The broad priorities set out are to .-address the issues of fair quotas and voice." (Communique of the IMFC) At a G-20 finance minister meeting on Oct. 2005 as well, Korea drew up the following joint statement by proactively taking part in concrete roadmap deduction for quota readjustment: "G-20 underscores the critical importance of achieving concrete progress on quota reform ..." In addition, Korea drew up the following Communique at IMFC conference (Washington) on April, 2006, gaining outcomes to secure a quota corresponding to Korea's competitiveness by discussing quota readjustment intensively: "The Committee reiterates that the IMF's effectiveness and credibility as a cooperative institution must be safeguarded and its governance further enhanced, emphasizing the importance of fair voice and representation for all members. We underscore the role an ad hoc increase in quotas would play in improving the distribution of quotas to reflect important changes in the weight and role of countries in the world economy. The Committee agrees on the need for fundamental reforms. The Committee calls upon the Managing Director to work with the IMFC and Executive Board to come forward with concrete proposals for agreement at the Annual Meetings." With greater economic power comes greater economic responsibility This year's IMF/World Bank annual general meeting will be held on September 19~20 in Singapore, Asia's finance as well as logistics hub. Deputy Prime Minister and Minister of Finance & Economy Kwon O-kyu, Republic of Korea, is scheduled to take part in an in-depth discussion regarding the international economy with the finance ministers of 24 other major countries G-7 & BRICs. Director-General Kwon said: "In the IMF/WB annual general meeting, international finance institutions' representatives such as CITI, HSBC, and Goldman Sacs usually take part in large numbers. By taking advantage of such an opportunity, Korea also plans to enhance mutual understanding with international finance institutions and to enlarge as well as to strengthen financial collaboration." In particular, the Director-General expressed big expectations, saying that the possibility of Korea's quota getting increased in this year's annual general meeting is high. If the IMF quota is increased, this means that Korea's phase is raised not only within the IMF, but also in international financial society, and our right to speak is reinforced, he underscores. Changes coming through IMFC/DC meeting Concerning agendas to be discussed at this year's IMF/WB annual general meeting, Kwon explains: "Since the annual general meeting is inappropriate for discussing specific issues in detail due to high participant numbers, IMFC/DC meeting is held two times a year." The IMFC was initiated by the IMF to be in charge of measures concerning international currency system management and supervision, consideration about financial transfers to developing countries and emergency affairs threatening the international currency system. The World Bank founded a Development Committee (DC) to concretely discuss major development tasks or finance transfer problems for the economic development of developing countries. As regarding this year's Singapore IMFC/DC discussion agendas, international policies of mutual assistance with world economy danger factors such as a global imbalance as well as high oil prices are expected to be discussed in the IMFC meeting. In the DC meeting too, lower-income countries' development problems will be discussed with an objective to accomplishing MDGs (Millennium Development Goals) in which the whole world takes part, Kwon said. Kwon further emphasizes that significance can be found in that Korea has acquired a board of directors seat in two different institutions for the first time in 2004 after 50 years since joining the IMF/WB. Therefore our country has come to take substantial part in key discussions of international financial circles such as the world economy outlook, danger factors and countermeasure plans in the coming years in this IMFC/DC meeting. The Director General on one hand explains that the IMF is driving forward reform to receive member countries' diverse demands and to cope with a rapidly-changing international finance environment. As part of such IMF reform, it is reported that the IMF is driving forward control structure improvements in response to member countries' criticisms. These criticisms highlight that changing international circumstances such as the formation of the EU and rapidly emerging markets are not reflected in the IMF's control structures. Also, many IMF control structures are unnecessary and only serve to bloat an already inefficient system. Kwon concluded by saying that quota readjustment is under way which will reflect each member country's economic power through increased quota amounts plus discussions to strengthen lowerincome countries' right to speak.