Selected Decisions and Selected Documents of the International Monetary Fund
Chapter

E. Increase in Quotas of Fund Members—Twelfth General Review of Quotas

Author(s):
International Monetary Fund
Published Date:
April 2004
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Report of the Executive Board to the Board of Governors

Article III, Section 2(a) of the Articles of Agreement provides that “the Board of Governors shall at intervals of not more than five years conduct a general review, and if it deems it appropriate propose an adjustment, of quotas of members.” The five-year period for the Twelfth Review will end on January 30, 2003. The Executive Board has established a Committee of the Whole in accordance with Rule D-3.

The Executive Board’s discussions for the Twelfth Review have taken place against a background of ongoing reform of the Fund, to take account of changes in the world economy, the globalization of financial markets, and the increased size and volatility of international capital flows. The Executive Board has discussed issues regarding the role and size of the Fund and the adequacy of its resource base. The Executive Board has also considered the distribution of Fund quotas to reflect changes in the world economy, including reforms of the formulas used to calculate quotas. Measures to strengthen the governance structure of the Fund have also been discussed, including a possible amendment to the Articles of Agreement to increase the number of basic votes. However, there is not the necessary broad support among Executive Directors for a recommendation to increase quotas or implement changes in the distribution of quotas or the governance of the institution. At this time, the Fund’s liquidity position appears adequate, barring unforeseen developments that could result in large new demands for Fund resources.

Therefore, the Executive Board recommends that the Board of Governors adopt a resolution concluding the Twelfth General Review by January 30, 2003 with no proposal to increase quotas. Furthermore, the resolution also notes the intention of the Executive Board during the period of the Thirteenth General Review, which the Articles of Agreement provide commences upon completion of the present review, to monitor closely and assess the adequacy of Fund resources, to consider measures to achieve a distribution of quotas that reflects developments in the world economy, and to consider measures to strengthen the governance of the Fund. The Executive Board will provide a status report on its discussions to the International Monetary and Financial Committee by the 2003 Annual Meeting and establish, as the discussion may warrant, a Committee of the Whole to make specific recommendations.

In view of the foregoing considerations, the Executive Board recommends that the Board of Governors adopt the resolution set out in the attachment to this report.

Proposed Resolution of the Board of Governors1

Resolved:

That the Board of Governors, having noted the report of the Executive Board entitled Twelfth General Review of Quotas—Report of the Executive Board to the Board of Governors, hereby resolves to conclude this review under Article III, Section 2(a) with no proposal to increase quotas. It notes the intention of the Executive Board during the period of the Thirteenth General Review, which the Articles of Agreement provide commences upon completion of the present review, to monitor closely and assess the adequacy of Fund resources, to consider measures to achieve a distribution of quotas that reflects developments in the world economy, and to consider measures to strengthen the governance of the Fund. It also notes the intention of the Executive Board to provide a status report on its discussions to the International Monetary and Financial Committee by the 2003 Annual Meeting and establish, as the discussion may warrant, a Committee of the Whole to make specific recommendations.

Adopted by the Board of Governors, effective January 28, 2003, and designated Resolution No. 58-1.

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