Executive Board of International Monetary Fund (IMF) reached an agreement Thursday on a program of fundamental reforms of the institution's governance and quotas, giving up-and-coming developing countries greater power in running the fund.

"This two-year program of reforms will include initial ad hoc quota increases for four countries that are clearly under-represented -- China, (South) Korea, Mexico and Turkey," IMF Managing Director Rodrigo de Rato told a news conference here.

"This will now be sent to the Board of Governors for their approval at Singapore," he said. The IMF and World Bank will be holding their annual meetings on Sept. 19-20 in Singapore.

The fund's quotas determine voting power and have a bearing on the amount members can borrow.

At present, Rato said, the relative quotas and voting shares of the members do not adequately reflect the greatly increased economic weight of major emerging market economies in the global economy.

He took the situation in Asia as an example. Asia accounts for about a quarter of world gross domestic product. This is about one third higher than its share of Fund quotas.

"The situation of some individual countries is even more out of line," Rato said. "China's GDP is one and a half times its share of Fund quotas. (South) Korea's share in world GDP is twice its share in Fund quotas."

"I therefore see a clear need for a rebalancing of quotas to reflect changed economic realities."

There will be further ad hoc increase in quotas for a broader range of members, said the IMF chief.

At the Singapore meeting, issues to be discussed include proposals for reform of the Fund's governance structure and the changes IMF is making in the way the fund conduct macroeconomic surveillance, which is a core function of the international institution, according to Rato.

Source: Xinhua