Alignment with GDP

Russia insists that IMF capital quotas match the size of the country's economy

As part of the meeting of G8 finance ministers opening today in Essen, Germany, the discussion on reform of the International Monetary Fund (IMF) will continue. The essence of the proposed changes, in particular, is the redistribution of state participation quotas in the IMF capital and, accordingly, the weight of a particular country in the fund. Uncompromising discussions on this issue have been going on for many months, but so far an acceptable mechanism has not been found. The ultimate goal of the reform is clear: it is necessary to increase the role of the so-called “underrepresented” - those countries whose economies have grown rapidly in recent years and decades, primarily Asian and South American ones. However, it is obvious that the “victims” will be European countries, so they are not enthusiastic about quota reform. The “weight” of the United States in any scenario will be high, so Washington supported the idea of ​​reform.

To get things moving, IMF head Rodrigo de Rato last spring proposed carrying out a reform in two stages: first, slightly increasing the quotas of four countries - China, Korea, Mexico and Turkey - at the expense of all other countries, and only then recalculating all quotas based on a “clear and transparent” formula. US representatives made it more specific: the formula needs to be untied from a number of complex indicators, taking one as a basis - GDP. They think the same in Moscow. Russia's position is the need to “link quotas to the real economy, to GDP,” a Finance Ministry source who was part of the Russian delegation at the meeting in Essen told Vremya Novostei yesterday.

Recently, the IMF held a preliminary discussion of proposals developed by fund specialists. It turned out that the set goals are not easy to achieve: even using formulas tied to GDP, it is possible to achieve a sharp increase in quotas in the United States and Europe and a reduction in developing countries. In some calculations, Russia’s quota also becomes almost unnoticeable (it is now 2.74%).

Moscow's proposal may become the basis for a compromise. According to Russia, the distribution of quotas should be based on GDP at purchasing power parity, and not, for example, on GDP per capita. As the Ministry of Finance is confident, “this will make it possible to really expand the quotas of rapidly developing countries that have already gained significant weight in the world economy, including China, India, Brazil (Russia, of course, too. -- Ed. )". Apparently, the IMF reform will be discussed during a separate meeting between Alexei Kudrin and IMF Managing Director Rodrigo de Rato, which will take place in Essen. (In addition, the head of the Russian Ministry of Finance will meet with US Treasury Secretary Henry Paulson.)

The current meeting of G8 finance ministers, which is organized and hosted by Germany as the country presiding over the G8 in 2007, will be held, as a Vremya Novostey source says, in an incomplete format, which, however, happened more than once in previous years. In other words, the ministers of the USA, Japan, France, Germany, Italy, Canada and Great Britain will discuss problems in areas in which Russia’s weight is still small without their Russian counterpart. For example, meeting participants can easily do without Alexei Kudrin when discussing the activities of hedge funds (risk insurance funds). “Hedge funds are just beginning to emerge here, so our non-participation in this discussion is not critical,” says a Finance Ministry official.

Russia will not participate in the discussion of problems of the world economy, related, in particular, to the situation on the foreign exchange markets. (However, as a Vremya Novostey source says, the situation is changing, which is understood in the West, and the issue of expanding agenda items with Russia’s participation is being discussed.) “The issue of exchange rates at the upcoming meeting of G7 finance ministers, as at previous meetings, will play an important role,” German Deputy Finance Minister Thomas Mirow said yesterday. The US and Europe are now extremely worried about the depreciation of the Japanese yen.

But the conversation on problems the solution of which Russia can and does influence most directly will take place with the active participation of the Russian delegation. Among them is energy security. Germany is continuing this theme, initiated by Russia during its G8 presidency last year, but, according to the source, “with a greater emphasis on the environment.” (We are talking about the need to improve the efficiency of the energy sector, taking into account the fact that inefficient use of resources negatively affects the environment.) In addition, Alexey Kudrin is invited to a discussion on the topic of improving financial management in African countries.

But when discussing the problems of combating the financing of terrorism, Alexey Kudrin will even become the presenter. “This clearly indicates Russia’s active participation in the Financial Eight and that we are coordinating efforts on such sensitive issues as, for example, the fight against the financing of terrorism,” says a source in the Ministry of Finance.

The German side intends to continue in Essen the practice of holding meetings in the outreach format (beyond the main agenda), initiated by Russia last year. The finance ministers of Brazil, India, China, Mexico and South Africa are invited. Among the main topics of the format are the development of the bond market and diversification of stock markets. “Financial centers still do not respond quite adequately to global economic realities. Asia's breakthrough is obvious. Therefore, the conversation, apparently, will be about strengthening the role of Asian exchanges, Asian securities markets in the global financial architecture and how to gently move to a redistribution of power in the financial world,” says a Ministry of Finance official.

The issues of the Doha round of negotiations within the World Trade Organization (WTO), the political impetus for the continuation of which was recently given at the World Economic Forum in Davos, will be discussed in the same format. Russia is clearly interested in this discussion, since its accession to the WTO is not far off. In Essen, there will be, in fact, a comparison of the positions of the leading countries before resuming negotiations.

Mikhail VOROBYEV, Andrey DENISOV