Turkey seeks greater role, credibility at IMF
The IMF’s top management currently consists of seven seats occupied by developed European countries, but according to a recent decision taken at a G-20 meeting, two of the seats will soon be given to non-European countries. Turkey is striving to obtain one of the two seats in question, and its chances are growing stronger thanks to the new world economic trend, several experts believe.
After the necessary legal procedures are complete, Turkey’s quota in the IMF, within the scope of the 14th General Quota Review decision, will increase from 1.193 billion special drawing rights, or SDR, to 4.659 billion SDR. SDRs are supplementary foreign exchange reserve assets defined and maintained by the IMF. The SDR is not a currency, but it represents a potential claim on the currencies of member countries for which they may be exchanged.
According to IMF procedures, a country’s quota level is essential in determining that country’s access to IMF credits.
The G-20 countries had, on this issue, promised to complete their domestic legal procedures before the 2012 IMF/World Bank annual meetings.
In this framework, as a general rule, a country can draw credits in a term of 12 months, equivalent to a maximum 200 percent of its quota and, as a total, a maximum 600 percent of its quota from the IMF General Resources Account.
According to this outlook, Turkey’s total amount of accessible credits from the IMF General Resources Account, after its new quota is in place, will be 27.952 billion SDR. But in case of necessity, countries have exceptional access where they can draw credits above these limits.
Within this framework, credits above these amounts can also be used with an approval from the IMF Board of Executive Directors.
With the IMF’s new quota reform, the total credits Turkey can use from the IMF will reach $42 billion.
Turkey’s representation to increase
The increase in Turkey’s quota also means more representation for Turkey. In the next phase, Turkey’s representation in the IMF Board of Executive Directors will no longer be through Belgium, but by an individual representation alternate or alone. Belgium presides over 10 countries, with Turkey among them.
On the board, 6 percent of shares was transferred from developed countries to the developing countries, thus paving way for the greater representation of developing countries on the IMF Executive Board. Also, after the quota reform is fully in place, at least until the next elections, developed European countries will abandon two of their seats on the IMF Executive Board.
Within the framework of the reform, the “appointed directors category” on the Executive Board, which is made up of those countries with the highest five quotas, will come to an end. And after that, the Board of Executive Directors will only consist of elected executive directors.
June 19, 2011
SOURCE: HURRIYET DAILY NEWS
