Government and Policy

China's influence grows at World Bank

(Xinhua)
Updated: 2010-04-26 06:22

WASHINGTON - World Bank member countries reached an agreement on Sunday to shift more power to emerging and developing nations, under which China's votes increased to 4.42 percent from 2.77 percent, making it the third largest voting power holder in the Washington-based international institution.

In total, the World Bank approved a 3.13-percentage-point increase in the voting power of the Developing and Transition Countries (DTCs), making it 47.19 percent now and representing a total increase of 4.59 percentage points for the DTCs since 2008.

"This increase fulfills the Development Committee commitment in Istanbul in October 2009 to generate a significant increase of at least 3 percentage points in DTC voting power," said the World Bank in a statement.

After a first phase of reforms agreed in 2008, developing countries have an around-44-percent share in the World Bank.

At the Pittsburgh G20 summit in September 2009 and the Istanbul Development Committee meeting in October 2009, the bank's shareholders agreed to raise the voting rights to at least 47 percent for developing and transition countries.

"We were just pleased that we are getting close to reflecting China's increasing share in world economy, and that is reflected in edited voting share," World Bank President Robert Zoellick told Xinhua after the Development Committee meeting.

"Today was a good day for multilateralism," said Zoellick. " This shift of shares is agreed by our shareholders. They try to recognize the change in the world economy and include the contribution to the development in the methods, which can encourage developing countries in transition."

"The bank has a very proud and successful relationship with China and this year is our 30th anniversary. I look forward to going to China later this year and helping celebrate it," said the World Bank chief.

U.S. Treasury Secretary Timothy Geithner said earlier Sunday that the change in voting power would reflect the growing shift in power away from established nations.

"The new formula will better reflect the weight of the developing and transition countries in the global economy, while protecting the voice of the smallest and poorest countries," he said in a statement.

"Because we believe this overall outcome merits our strong endorsement, the United States agreed not to take up its full shareholding in this new arrangement," he said.

The United States currently still holds a 16.4-percent voting share in the World Bank, and Japan 7.9-percent.

Chinese Finance Minister Xie Xuren welcomed the shift.

Consensus reached on the voice reform package "represents an important step towards equitable voting power between developing and developed members," said Xie in a statement.

"This also demonstrates that Development Committee can play a pivotal role in improving the World Bank's governance and promoting global development," he stressed.

But he also said the achievement is "only part of the ongoing process," noting China supports periodic review of International Bank for Reconstruction and Development (IBRD) shareholding in future.

The IBRD is the original institution of the World Bank Group and normally represents the group.

"The future shareholding principles should continue to be based on economic weight, give full consideration of developing countries' contribution to IBRD as development partners, and aim to achieve the ultimate goal of equitable voting power between developing countries and developed countries," he added.

"We call for continuous close collaboration from all shareholders on IBRD's Voice and Participation Reform," said the minister.