Bhutan gets more IMF votes

February 5 – Bhutan is on its way to getting more voting rights in the international monetary fund (IMF) with a reform in the organisation’s quota and voice system.

Bhutan is one of 186 member countries of IMF, which is an international institution meant to oversee the stability of the global financial system and also provide highly conditional loans in case of balance of payment emergencies or economic crisis.

“More votes is important because you can withdraw more money if need be, have more say in IMF decisions and more international prestige when dealing with other countries,” said royal monetary authority (RMA) DMD, Dechhen Tshering.

As part of the reform, the basic vote of 250 per member has been increased across the board to 750, which according to IMF is expected to benefit smaller countries like Bhutan. This is because till date it cost SDR (special drawing rights) 100,000 to get one vote, which meant that richer countries bought more voting powers. SDR is an average value of global convertible currencies like the dollar, pound, sterling, yen, franc and euro.

In addition to this, Bhutan is among the 54 countries, along with those like India, Sri Lanka and Nepal, to be offered a chance to buy more voting power by depositing more money, which in Bhutan’s case is SDR 2.2 mn more then the current SDR 6.3 mn. Of the extra 2.2 million, only 0.55 will have to be paid in SDR, while the rest can be paid in the country’s currency.

This would mean that Bhutan’s current voting power would increase from the 0.014 to 0.033 percent of the total votes. In comparison, India’s votes has increased from 1.916 to 2.338 and Nepal’s from 0.043 to 0.058.

Reflecting the need for reform to give smaller countries a strong voice and also the new global order after the financial crisis votes of countries like USA, UK, France, Japan, etc., have all seen a decline though they still hold the majority.

“Bhutan so far hasn’t had to borrow from IMF due to the country’s relatively stable financial system, but the IMF has provided technical assistance to set up RMA in 1983, the tax policy, budgeting, accounting, fiscal advice, income taxation, tax auditing, statistics and others,” said Dechhen Tshering.

source: kuensel