South Korea Gains Status with IMF

South Korea has made a huge stride with the IMF. I've been watching recent efforts to boost Korea global status.

Significantly...
The International Monetary Fund (IMF) announced Monday that it has almost doubled Korea’s stake in the influential fund, increasing Korea’s global influence.

The IMF, an organization of 184 countries, works to foster global monetary cooperation, financial stability, international trade, high employment, sustainable economic growth, and to reduce poverty.

The IMF announced Monday night that its member states approved the quota of four under-represented countries: Korea, China, Mexico and Turkey. Korea’s stake rose to 1.35 percent from 0.76 percent. Of the member countries, 156 voted for raising the quotas, a 90.6 percent approval rate.

When Korea joined the IMF in the 1955, its voting shares were a mere 0.14 percent. In spite of rapid economic growth, Korea’s quota increased little. Korea’s 0.76 percent stake in the IMF was far short of its position in the global economy. It constitutes 1.6 percent of the global GDP. Currently, the United States has the biggest quota of 17 percent, followed by Japan with 6.1 percent.

The IMF has conducted voting by letter since Sept. 1 on whether Korea, along with China, Mexico and Turkey, should have quota increases. At least 85 percent of the 184 IMF member countries need to approve quota increases.

The voting closed Monday at 4 p.m. The Korean government solicited support right up to the last moment, as some large developing countries, such as India, Brazil and Argentine opposed the quota increases.

The Finance and Economy Minister Kwon O-kyu asked for Asia’s support at the meeting with Indonesian Finance Minister Sri Mulyani Indrawati on Sept. 16. Kwon promised that Korea would help other Asian countries increase their quota in the IMF during the second phase of reform in the organization.

With the quota approval, Korea jumped to 19th from 28th position among the 184 countries. China also saw its quota increase to 3.719 percent from 2.980 percent, Mexico to 1.449 percent from 1.210 percent, and Turkey to 0.548 percent from 0.451 percent.

Kwon said Korea’s taking a post of an executive director at the IMF in 2004 was helpful. In spite of having the world’s 12th largest economy, Korea took the first executive director post in 2004, due to its small quota, according to the ministry. However, Korea now has more chance to get executive director positions, thanks to the quota increase, the ministry explained.

Korea can now rely more on the IMF in any future financial crisis, as the quota determines how much money a member country can borrow from the IMF. During the financial crisis in 1997, Korea had a big disadvantage due to its small quota. Those disadvantages included an additional plunge in sovereign ratings, additional commissions and the delay of financial support, the ministry explained.

We have recognized that the quota increase in the IMF means more influence not only within the IMF but also around the globe, Kwon said. The effort has enhanced Korea’s role in global society,