BICS to gain largest IMF Quota Shares

The International Monetary Fund(IMF) has been developed to stabilize international exchange rates and facilitate development with an macroeconomic perspective. It also provides its members with financial and technical assistance.

Brazil, China, India, South Korea and Mexico will recieve the largest share of fund from IMF so as to fasten the speed of economic development in these key economies. The 5 nations will be among the 54 nations which will recieve extended shares once the 2008 reforms will be implemented. While these 54 countries will get an increase in quota shares of 4.9 percentage points, 135 countries will see an increase in voting share of 5.4 percentage points due to the combined effects of the increase in quotas and basic votes. Quotas basically are the voting powers of a country in the 185 countries drafted committee.

The final verdict will be done in the Conference of Finance Leaders and Governors from 24th to 26th April. The other issues included are the Rebalancing of Countries in 2011, this may include strengthening on Developing countries hold in IMF quotas.

This capital quota share hike has been due to the double-punch the Developing economies have to bear including the Crashing of Internal Capital Indices along with recessionary acts leading to weakening of Gross Domestic Product(GDP). The major notion behind this initiative is to influx more capital in these economies.

Many other strategic steps including development of a riskfree investing environment and enhancement in analysis of risk and linkages in the real economy and financial sector.

G7 and G20 countries

G7 Countries

The G7 was an informal gathering of heads of state and governments of the world's most advanced economies (Canada, France, Germany, Italy, Japan, the United Kingdom and the United States).

In the early stages, members of the G7 were accompanied at meetings by their foreign and finance ministers. In 1998, the British Presidency decided to separate the ministerial meetings from the original summit in order to keep the original concept of a small, informal gathering. In the same year, Russia joined what then became the G8. Since 2005, the G8 has been holding dialogues with the major emerging economies of Brazil, China, India, Mexico and South Africa.

G8 finance ministers meet once a year before the actual summit. However, finance ministers also meet in general three more times (early in the year, and at the margin of the spring and annual meetings of the international financial institutions), but in a G7 (instead of a G8) framework. . Since the introduction of the euro, the European Central Bank (ECB) and the President of the Eurogroup also attend. (Courtesy:Wikipedia)

The G7/8 deals with such issues as: global economic outlook and macroeconomic management, international trade, energy, climate change, and relations with developing countries.

G20 Countries

The G20 (Group of 20) is a group representing 19 of the world's largest economies plus the European Union that are strategically important and influential in the world economy. The G20 was formed as a new forum for cooperation and consultation on matters pertaining to the International Financial System (IFS).

The membership of the G20 comprises the finance ministers and central bank governors of the G7, 12 other key countries, and the European Union Presidency (if not a G7 member); the European Central Bank; the Managing Director of the International Monetary Fund; the Chairman of the IMFC; the President of the World Bank; and the Chairman of the Development Committee.

The G20 is an informal forum that promotes open and constructive discussion between industrial and emerging-market countries on key issues related to global economic stability.

The members of the G20 are the finance ministers and central bank governors of 19 countries: Argentina, Australia, Brazil, Canada, China, France, Germany, India, Indonesia, Italy, Japan, Mexico, Russia, Saudi Arabia, South Africa, South Korea, Turkey, the United Kingdom and the United States of America. The European Union is also a member, represented by the rotating Council Presidency and the European Central Bank.