Emerging economies participation in IMF
By Adina Moloman
Source: The News
A detail that I believe it’s important to review is the G20’s intention to restore investor confidence, through member states participation in IMF.
A consequence of the G20 summit in Mexico was the achievement of record donations of member states to the International Monetary Fund.
It’s more advantageous for emerging economies, which receive benefits as a consequence of their contribution to IMF. The most important one is increasing its decision making influence on the international arena.
Countries such as Brazil and India are having more influence in the governance of the IMF in exchange for greater contribution and countries like US are declining their contribution.
In my opinion, the fact is that for these emerging economies, the bigger the decision making influence of the IMF state member, the higher is their influence on the international market and also their influence to attract foreign direct investment for their country.
With this logic, The Treasury and Public Finance Secretariat (SHCP) of Mexico agree to increase last May 2012, the government’s contributions to the International Monetary Fund (IMF) to up to 8.9 billion Special Drawing Rights (SDRs), or $14.4 billion.
The next step is the president to sign the IMF Agreement and The Central Bank of Mexico (Banxico) will make the Mexican government’s contribution to the international financial organization.
With this increase, Mexico’s participation in the organization’s total quotas will go from 1.52 to 1.87 percent, offering Mexico better conditions to exercise membership rights. Mexico position with these new contributions rises from 16th to 14th out of 187 countries, and its voting rights increase from 1.47 to 1.80 percent.
This offers Mexico a better access to resources and gives an indirect benefit to Mexico Manufacturing conditions and industry.
