West faces 'fractious week' of talks over surrendering World Bank votes to China

As the Bric countries jostle for more say at the IMF, G20 ministers face dilemmas– not least how to travel

A "fractious week" of talks faces those world leaders able to attend the annual meetings of the World Bank and the IMF and a simultaneous G20 summit in Washington this week.

The World Bank and IMF say they expect to go ahead with the meetings of global finance ministers and central bankers, which begin today, despite air travel disruptions across Europe caused by volcanic ash.

The Chancellor, Alistair Darling, and the Governor of the Bank of England, Mervyn King, are due to attend formal sessions at the weekend on behalf of the UK, but their travel plans are subject to the same disruption as any other traveller.

A levy on the banks and aid to Greece are among the subjects on the agenda, though if many European figures are absent many crucial decisions will have to be deferred.

World Bank president Robert Zoellick told Reuters in an interview that his organisation – which offers assistance to the poorest nations in the world – will soon benefit from a further $3.5bn (£2.29bn) in capital from member states, much of it from newly emerging economic powers such as China. This is the first increase in the World Bank's capital in twenty years, and will help replenish its reserves, depleted through some $100bn in lending during the worst global downturn in three quarters of a century.

The problem, however, is that the Brics in particular – Brazil, Russia, India and China – are also seeking a bigger say in the running of the World Bank and the IMF.

The voting rights allocated to China are in line with their financial contributions to the two bodies, but are some way below where they might be if they were on par with China's importance in the world economy. Whereas China accounts for about 11 per cent of global GDP, it only has 2.8 per cent of World Bank voting – less than Britain or France and the same as Canada. India has the similar voting power; Brazil scarcely more than Belgium. China and the others can only gain influence at the expense of the established powers, and many developed economies remain wary of losing influence – hence the "fractious" talks ahead.

At crucial points in the revival o f the world economy, Mr Zoellick added that "the strength of the recovery is a serious question mark".

The British government has long supported radical reform of the IMF and World Bank – Gordon Brown has even gone so far as to call for a "New Bretton Woods" to replace the institutions founded at the original conference in 1944.

In an informal stitch up that has lasted ever since, the Europeans are traditionally allowed to choose the head of the IMF, while the US is allowed to pick the presidency of the World Bank. However, the rise of Japan, now China and the slump in the advanced economies has altered that dynamic forever.

Mr Zoellick has sought a two pronged solution to the problem – a general increase in subscriptions plus an adjustment in favour of emerging economies.

"People are coming together on the capital increase and I think people are looking at about $3.5bn for that," Mr Zoellick said. "That, to me, would be a good result."

At the G20 leaders' Summit in Pittsburgh last year, government agreed a 3 per cent shift in overall voting power in the World Bank and at least 5 per cent for the International Monetary Fund for emerging economies. They are, however, demanding a 6 per cent shift in voting power at the World Bank.

Asked whether it was possible for an agreement to be concluded on at least a 3 per cent movement in votes from developed to developing countries, Zoellick said: "I believe the shareholders are committed but it's a fractious process."

Mr Zoellick acknowledged the problems in getting nations – shareholders in the Bank – to agree to reform: "It's a shareholder decision and one where I have less levers because they have to decide. On this one, the allocation remains a difficult issue for the shareholders to work out."

At a recent summit the BRICs declared that "the IMF and the World Bank urgently need to address their legitimacy deficits. Reforming these institutions' governance structures requires first and foremost a substantial shift in voting power in favour of emerging market economies and developing countries to bring their participation in decision-making in line with their relative weight in the world economy."

While supportive of their claims, Mr Zoellick has also urged the emerging developing nations to offer more flexibility in the Doha round and other forums in return. In a speech last week Mr Zoellick said: "Modernising multilateralism isn't all about developed countries learning to adapt to the needs of rising powers. With power comes responsibility."

News
The slice of Prince Charles and Princess Diana's wedding cake and the original box from 29 July 1981
newsPiece of Charles and Diana's wedding cake sold at auction in US
News
James Argent from Towie is missing, police say
newsTV star had been reported missing
Arts and Entertainment
Gregg Wallace in Summer's Supermarket Secrets
tv All of this year's 15 contestants have now been named
Arts and Entertainment
Inside the gallery at Frederick Bremer School in Walthamstow
tvSimon Usborne goes behind the scenes to watch the latest series
PROMOTED VIDEO
Life and Style
A picture taken on January 12, 2011 shows sex shops at the Paris district of Pigalle.
newsThe industry's trade body issued the moratorium on Friday
News
Winchester College Football (universally known as Winkies) is designed to make athletic skill all but irrelevant
Life...arcane public school games explained
Arts and Entertainment
Could we see Iain back in the Bake Off tent next week?
tv Contestant teased Newsnight viewers on potential reappearance
Life and Style
Silvia says of her famous creation: 'I never stopped wearing it. Because I like to wear things when they are off the radar'
fashionThe fashion house celebrated fifteen years of the punchy pouch with a weighty tome
News
i100(and it's got nothing to do with the Great British Bake Off)
News
Angelina Jolie with her father Jon Voight
peopleAsked whether he was upset not to be invited, he responded by saying he was busy with the Emmy Awards
News
Bill Kerr has died aged 92
peopleBill Kerr appeared in Hancock’s Half Hour and later worked alongside Spike Milligan and Peter Sellers
News
news It's not just the world that's a mess at the moment...
Sport
footballPremiership preview: All the talking points ahead of this weekend's matches
News
Keira Knightley poses topless for a special September The Photographer's issue of Interview Magazine, out now
people
News
ebooksAn evocation of the conflict through the eyes of those who lived through it
Voices
The Ukip leader has consistently refused to be drawn on where he would mount an attempt to secure a parliamentary seat
voicesNigel Farage: Those who predicted we would lose momentum heading into the 2015 election are going to have to think again
Arts and Entertainment
Cara Delevingne made her acting debut in Anna Karenina in 2012
film Cara Delevingne 'in talks' to star in Zoolander sequel
News
i100
Sport
Mario Balotelli pictured in his Liverpool shirt for the first time
football
Life and Style
tech
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Financial Technical Consultant (C++, C#, Finance, MSc, PhD)

£50000 per annum: Harrington Starr: Financial Technical Consultant (C++, C#, F...

Data Scientist (SQL,Data mining, data modelling, PHD, AI)

£50000 - £80000 per annum + benefits+bonus+package: Harrington Starr: Data Sci...

SAS Business Analyst - Credit Risk - Retail Banking

£450 - £500 per day: Orgtel: SAS Business Analyst, London, Banking, Credit Ris...

Project Manager - Pensions

£32000 - £38000 Per Annum Bonus, Life Insurance + Other Benefits: Clearwater P...

Day In a Page

Ukraine crisis: The phoney war is over as Russian troops and armour pour across the border

The phoney war is over

Russian troops and armour pour into Ukraine
Potatoes could be off the menu as crop pests threaten UK

Potatoes could be off the menu as crop pests threaten UK

The world’s entire food system is under attack - and Britain is most at risk, according to a new study
Gangnam smile: why the Chinese are flocking to South Korea to buy a new face

Gangnam smile: why the Chinese are flocking to South Korea to buy a new face

Seoul's plastic surgery industry is booming thanks to the popularity of the K-Pop look
From Mozart to Orson Welles: Creative geniuses who peaked too soon

Creative geniuses who peaked too soon

After the death of Sandy Wilson, 90, who wrote his only hit musical in his twenties, John Walsh wonders what it's like to peak too soon and go on to live a life more ordinary
Caught in the crossfire of a cyber Cold War

Caught in the crossfire of a cyber Cold War

Fears are mounting that Vladimir Putin has instructed hackers to target banks like JP Morgan
Salomé's feminine wiles have inspired writers, painters and musicians for 2,000 years

Salomé: A head for seduction

Salomé's feminine wiles have inspired writers, painters and musicians for 2,000 years. Now audiences can meet the Biblical femme fatale in two new stage and screen projects
From Bram Stoker to Stanley Kubrick, the British Library's latest exhibition celebrates all things Gothic

British Library celebrates all things Gothic

Forthcoming exhibition Terror and Wonder: The Gothic Imagination will be the UK's largest ever celebration of Gothic literature
The Hard Rock Café's owners are embroiled in a bitter legal dispute - but is the restaurant chain worth fighting for?

Is the Hard Rock Café worth fighting for?

The restaurant chain's owners are currently embroiled in a bitter legal dispute
Caribbean cuisine is becoming increasingly popular in the UK ... and there's more to it than jerk chicken at carnival

In search of Caribbean soul food

Caribbean cuisine is becoming increasingly popular in the UK ... and there's more to it than jerk chicken at carnival
11 best face powders

11 best face powders

Sweep away shiny skin with our pick of the best pressed and loose powder bases
England vs Norway: Roy Hodgson's hands tied by exploding top flight

Roy Hodgson's hands tied by exploding top flight

Lack of Englishmen at leading Premier League clubs leaves manager hamstrung
Angel Di Maria and Cristiano Ronaldo: A tale of two Manchester United No 7s

Di Maria and Ronaldo: A tale of two Manchester United No 7s

They both inherited the iconic shirt at Old Trafford, but the £59.7m new boy is joining a club in a very different state
Israel-Gaza conflict: No victory for Israel despite weeks of death and devastation

Robert Fisk: No victory for Israel despite weeks of devastation

Palestinians have won: they are still in Gaza, and Hamas is still there
Mary Beard writes character reference for Twitter troll who called her a 'slut'

Unlikely friends: Mary Beard and the troll who called her a ‘filthy old slut’

The Cambridge University classicist even wrote the student a character reference
America’s new apartheid: Prosperous white districts are choosing to break away from black cities and go it alone

America’s new apartheid

Prosperous white districts are choosing to break away from black cities and go it alone