Proposed Amendment to the Articles of Agreement on the Reform of the IMF Executive Board and Fourteenth General Review of Quotas-Status of Acceptances and Consents

This paper updates the status of consents to the proposed quota increases under the 14th General Review of Quotas and of acceptances of the Proposed Seventh Amendment on the Reform of the Executive Board (“Board Reform Amendment”) as set out in the Board of Governors Resolution No. 66-2.

Abstract

This paper updates the status of consents to the proposed quota increases under the 14th General Review of Quotas and of acceptances of the Proposed Seventh Amendment on the Reform of the Executive Board (“Board Reform Amendment”) as set out in the Board of Governors Resolution No. 66-2.

1. This paper updates the status of consents to the proposed quota increases under the 14th General Review of Quotas and of acceptances of the Proposed Seventh Amendment on the Reform of the Executive Board (“Board Reform Amendment”) as set out in the Board of Governors Resolution No. 66-2.

2. For the proposed quota increases under the 14th General Review of Quotas to become effective, members having not less than 70 percent of the total of quotas on

November 5, 2010 must consent to the increases in their quotas and the proposed Board Reform Amendment must have entered into force.1 The proposed Board Reform Amendment enters into force once the Fund certifies that three-fifths of the members (i.e., currently 113 members) representing 85 percent of the total voting power have accepted the proposed amendment.

3. As of December 12, 2011, 53 members having 35.96 percent of quotas as of November 5, 2010 had consented to their proposed quota increases under the 14th General Review of Quotas. As of the same date, 38 members having 30.08 percent of the total voting power had accepted the proposed Board Reform Amendment.

4. In adopting the 2010 quota and governance reforms, the Board of Governors called on members to use their best efforts to complete the necessary steps to make the 2010 quota and governance reforms effective no later than the 2012 Annual Meetings. With only 10 months remaining on this timeline, the Fund is far from reaching the necessary thresholds for the entry into force of the 2010 quota and governance reforms (see chart).

A01ufig01

Progress as of December 12, 2011

(Percent of Targets)

Citation: Policy Papers 2011, 100; 10.5089/9781498338080.007.A001

5. Staff and management continue to make efforts to facilitate progress. In particular: (i) an interdepartmental working group liaises regularly with country teams and resident representatives; (ii) Executive Directors have been given hard and soft copies of communications related to the acceptances of earlier amendments to the Articles of Agreement by members of their constituencies (for possible transmittal to capitals as a template of procedures to follow); (iii) progress toward acceptance of the Seventh Amendment is updated regularly on a website of the Secretary’s department, with inputs from area departments and the offices of Executive Directors, to monitor advances and identify hurdles; and (iv) management has urged country authorities on various occasions to provide consents and acceptances expeditiously. In addition, quarterly reports on the state of play with the 2010 reforms have been issued to the Board, most recently on October 3, 2011.

6. Efforts are also underway to lay the ground for the next election of Executive Directors. The Committee on the Rules for the 2012 Regular Election of Executive Directors (CREED) was established at end-September and is in the process of setting the framework for the 2012 elections. In this regard, it is expected that the CREED will begin consideration, in particular, of maximum and minimum voting share limits, which will play an important role in the consultation process that underpins the elections.

7. As reiterated in the September 2011, IMFC Communiqué, a timely implementation of the 2010 governance and quota reform package remains crucial to the legitimacy and effectiveness of the Fund. Efforts to meet the 2012 deadline should not be spared. Staff and management will continue to work with country authorities in this regard as appropriate, but a special role needs to be played in the period ahead by Executive Directors to help secure acceptances and consents as a matter of urgency. The next quarterly update to the Board will be issued in the first quarter of 2012.

Table 1.

Consents to Quota Increases and Status of Acceptances of the Proposed Board Reform Amendment

December 12, 2011

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Table 2.

Members that Have Consented to Their Quota Increase and Accepted the Proposed Board Reform Amendment

December 12, 2011

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1

The third condition set out in Resolution No. 66-2 has been met with the entry into force on March 3, 2011 of the Voice and Participation Amendment (Sixth Amendment) of the Fund’s Articles of Agreement, approved under Board of Governors Resolution No. 63-2.

Proposed Amendment to the Articles of Agreement on the Reform of the IMF Executive Board and Fourteenth General Review of Quotas—Status of Acceptances and Consents
Author: International Monetary Fund