IMF's Lipsky: "Turkey is among the strongest candidates for the new executive board"
If a compromise is reached, rising markets will have a stronger say in International Monetary Fund management, and Turkey is among the strongest candidates for this, said IMF First Deputy Managing Director John Lipsky yesterday. Lipsky's remarks came on the eve of IMF-World Bank annual meetings in Washington set to begin today. "European countries have nine seats on the board, but this shouldn't be like this. Many people look at this situation and ask why Turkey shouldn't be here," he said. Lipsky predicted that rising economies will take a stronger voice at the helm of the Fund, and among those economies Turkey is a top candidate. On planned changes to IMF quotas, Lipsky said the US, as the world's largest economy, will continue to have the biggest quota share, followed by China with the second or third biggest share when quota reforms are completed. A nation's IMF quota, the maximum amount of financial resources that it is obligated to contribute to the fund, determines its allotment of SDRs (Special Drawing Rights). But Lipsky downplayed the perception that quota changes will change everything, adding that in the IMF management decisions are taken unanimously. On the IMF's standby programs and instruments to solve the economic crisis that hit Asia in the 1990s, Lipsky said, "Now we see in modern finance that such measures and instruments absolutely fail to prevent economic crises. What we need is to take insurance measures before a crisis hits." Some countries have permanent seats on the 24-member IMF Executive Board, and European countries have eight or nine seats. The Fund is set to decide about changing the board's composition before its term expires at the end of this month.