Increased global spending 'should mean bigger say'
Updated: 2012-04-24 09:31
By Wei Tian (China Daily)
An increased global expenditure in the Ministry of Finance's 2012 budget plan reflects China's vision of playing a bigger role in international financial affairs, but experts said the bigger contribution should be accompanied by a bigger say.
According to the ministry's budget report on its website on Monday, its expenditure this year will total 3.9 billion yuan ($623 million), up 34 percent year-on-year.
The largest part of the increase includes special funds for an "optional capital increase in World Bank voting-right reform", "a general capital increase for the World Bank", and other donations to international organizations, which were new items in the 2012 budget plan.
Xu Wei, a researcher from the China Center for International Economic Exchanges, said the ministry's plan "shows China is actively participating in the operations of global financial organizations.
"It is a positive step because, by helping stabilize the global economy, we will eventually benefit our own growth," she said.
The new money add up to more than 700 million yuan in extra expenditure, and the move was among a series of capital injection commitments China has made to global financial institutions.
The IMF announced on Friday it had raised more than $430 billion at the conclusion of the G20 meetings of senior financial officials.
The figure nearly doubles the available resources of the Washington-based lender, and shows that the financial markets have sufficient firepower to handle any new problems arising from Europe's prolonged debt crisis, said IMF Managing Director Christine Lagarde.
However, countries such as China, Russia, India, and Brazil did not make public the exact amounts by which they would increase funding. Eurozone members, Japan and South Korea pledged to provide about $360 billion.
Domenico Lombardi, a Washington-based researcher at the Brookings Institution, said the decision by China, Russia, India and Brazil to withhold announcing their funding gives them room for negotiations on increased voting power. "The delay provides a bargaining chip for these countries to strengthen their negotiation position on the next quota round (of negotiations) that has just started," Lombardi was quoted by Reuters as saying.
Guo Tianyong, a professor at the Central University of Finance and Economics, said China and other BRICS countries are expressing discontent regarding the sluggish reform of international financial organizations, as well as calling for a bigger say.
"The final results of IMF quota reform and the capital increase will be decided by all players, but China and other emerging economies will not easily give up their claims," Guo said.
The IMF's executive board of directors initially agreed in October 2010 to transfer 6 percent of the voting rights to under-represented countries, such as emerging economies, by the end of 2012, which would reduce Europe's dominance on the IMF board and put China in third place in the weighing of votes.
But the draft will only be valid once it receives more than 85 percent of the votes. It has now won only 46 percent support from members.