Colombia will leave Brazil’s group at the International Monetary Fund and join one headed by Mexico as part of a reshuffle at the lender’s board of directors, central bank chief Jose Dario Uribe said.
“It’s a group where there’s a receptivity towards a country like Colombia, where there are great historical and commercial ties,” Uribe said in an interview in Tokyo today, where he is attending the IMF’s annual meetings. “It’s a group, without doubt, of interest.” Nicaragua, Cape Verde and East Timor will be added to Brazil’s constituency, according to an IMF document obtained by Bloomberg News.
Brazil has been one of the most vocal of the IMF’s 188 member countries, pushing policy makers to grant emerging markets more say at the institution and criticizing guidelines on capital controls. Brazil’s increasing clout on the global stage probably makes it challenging for a nation like Colombia to be heard, said Bessma Momani, a political science professor at the University of Waterloo in Canada.
“It can be difficult to be in a group with a rising economic power like Brazil” that “can be self-centered in its pursuit of its agenda,” Momani said in an interview in Tokyo. “Without Colombia, Brazilians are freer to act as they will, but losing a Spanish-speaking country doesn’t help its legitimacy as a regional power.”
Colombia’s new group is currently represented on a rotational basis by Mexico, Spain and Venezuela, which takes over the leadership on Nov. 1. The chair’s voting power will rise as a result of Colombia joining, and cement the group’s position as the largest of three Latin American constituencies on the board.
Uribe said details about Colombia’s role will be announced later.
The movements on the 24-seat IMF board, which approves loans and economic assessments of member countries, aren’t limited to emerging economies. Europe is making changes in its constituencies to meet a 2010 pledge to reduce representation by two chairs in favor of developing economies.
Belgium, Luxembourg and the Netherlands are forming their own group, along with countries currently represented by the Netherlands, Belgian Finance Minister Steven Vanackere told the IMF’s steering committee today. Turkey, Austria, the Czech Republic and Hungary are now in a group as well, and will rotate as executive directors, he said.
The chair of Nordic countries will extend its rotation to Baltic members of the group, Swedish Finance Minister Anders Borg said.
The European moves were criticized by Brazil and South Africa. Brazilian Finance Minister Guido Mantega called them “cosmetic” and said they will upgrade the status of emerging markets from the European Union.
“This of course fails to correct the overrepresentation of Europe in the board, sending yet another negative signal to the outside world,” Mantega said in his speech in Tokyo.
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