Emerging Nations Gain in IMF Power Shift

Finance ministers of the world’s 20 biggest economies voted on Saturday to grant emerging market countries like China, India and Turkey more weight in the International Monetary Fund (imf). Analysts expect the decision to deter G-20 nations from devaluing their currencies, and to make developing nations more willing to address the trade imbalances causing currency volatility and threatening an increase in protectionism.

Channel NewsAsia said the decision was a “historic moment” in an October 25 report. The article continues:

Emerging markets like Brazil, Russia, India and China were given 6 percent more voting power at the imf on account of their growing clout in the global economy.China emerged as a key winner, now the third-largest voting member of the fund, behind the U.S. and Japan. … G-20 officials praised the move, adding that this means China has agreed to make its foreign exchange regime more flexible to the market.

Meanwhile, the Wall Street Journal called the agreement “belated recognition of the old Western economies’ fading place in the Great Scheme of Things.”

As China’s massive growth forges on, the global balance of power will continue to shift.

And Beijing, never long content with the gains it makes, will prove the analysts’ optimism to have been hasty. To understand more about the global trade disputes currently underway and where they are leading, read “This Means War” from the Trumpet’s December 2010 issue.