The author is a council member of the Singapore Institute for International Affairs

The 61st session of the International Monetary Fund (IMF)/World Bank was held in Singapore on September 19-20, and carried great significance for the international financial system and the Asian region.

The focus of the media has been on the much-awaited and crucial reforms of the IMF, which were approved by 90.6 per cent of the world's finance ministers. China, the Republic of Korea (ROK), Mexico and Turkey had their voting rights or quotas raised with immediate effect to reflect their increasing importance in the world economy.

As a second stage of the reforms package, the IMF will begin work on overhauling the calculation of quotas via a "simpler and more transparent formula," to better reflect the relative weight of the world's economies. The governors have asked that work on this formula be completed within a year and that further adjustments be implemented within two years.

A decision was also made to "at least double" the basic votes of all countries, regardless of the size of their economies; this should preserve the voting power of the poorest developing countries within the IMF, which are also the principal borrowers from the fund.

These reforms would undoubtedly help counter the grousing of certain developing countries that the voting rights and quotas were "skewed" in favour of developed countries, notably the European economies. Before the increases made in Singapore, the quotas were also reflective of the past rapport des forces of the world's economies, without taking into the account the recent rise of certain developing economies, like China, the ROK and India.

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