Fourteenth General Review of Quotas—Realigning Quota Shares: Initial Considerations Supplement
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Publication Date:
24 Mar 2010
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9781498337762
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English
Keywords:
PP; quota share; director; share; PPP-GDP share; note purchase agreements; fund member; debt relief; loan commitment; Purchasing power parity; Africa; Global
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This note provides operational guidance and background information on the use of Fund resources for budgetary financing.

Abstract

This note provides operational guidance and background information on the use of Fund resources for budgetary financing.

I. Members’ Financial Contributions to the Fund

At the September meeting on quota calculations, a number of Executive Directors requested information on members’ financial contributions to the Fund. This chapter seeks to respond to that request. It first briefly discusses the various channels through which members contribute financially to the Fund and how these contributions have been taken into account in quota adjustments. It then reports a range of available data on members’ actual contributions. The data highlight that while all members contribute in some way to the Fund’s financing, there have been important differences in the scale and form of those contributions across the membership.

A. Members’ Financial Contributions and Quotas

1. Members’ financial contributions to the Fund come in a wide variety of forms, reflecting the cooperative nature of Fund membership. These include, among others, commitments to support the Fund’s liquidity through bilateral loan/note purchase agreements and the NAB/GAB, resources provided in the context of specific facilities (e.g., the oil facility), loan and subsidy resources provided to the PRGT and its predecessors, member contributions to debt relief operations in the context of HIPC, MDRI and the recent operation for Liberia, voluntary SDR trading arrangements, and financial support provided for other Fund activities, such as technical assistance and training. Members also make contributions that are mandated by Fund policies, such as quota subscriptions, participation in the FTP, charges and fees associated with borrowing from the Fund, and burden shared contributions. In this sense, most of the membership contributes in one way or another to the financing of the Fund, but there have been important differences in the scale and form of these contributions between countries and over time.

2. Past and expected future financial contributions to the Fund have played a role in determining individual members’ quotas. Members’ capacity and willingness to contribute financially to the Fund have long been recognized as relevant when determining quota increases. Notable examples include the ad hoc quota increase for Saudi Arabia in 1981, which took place outside of a general quota review, the ad hoc increase for Japan in the 9th Review, and ad hoc increases agreed in the context of general reviews for other countries that had or were expected to contribute to the Fund’s liquidity.1

3. These adjustments have been made outside of the quota formula. Elements of the formula can be viewed as capturing members’ potential to contribute financially to the Fund. In particular, GDP (measured at market exchange rates) and the reserve variable capture important aspects of members’ capacity to contribute. 2 However, actual financial contributions have been taken into account outside of the formula, and mainly in recognition of cases of particularly generous contributions.

4. This practice may partly reflect the difficult measurement and aggregation issues that would need to be addressed to capture members’ actual financial contributions on a more systematic basis.3 These include determining which types of contributions should be taken into account (e.g., whether to include only voluntary contributions, and which kinds of contributions), how different types should be aggregated (e.g., how to combine loan versus subsidy resources, loan commitments to the GRA versus the PRGT, and how to adjust for other forms of contributions, such as voluntary SDR trading arrangements or financing for technical assistance and training). A further question would be what time period(s) should be considered and how to aggregate contributions over time. It would also be important to avoid signaling that some forms of financing are more highly valued than others, which could discourage members from contributing in those areas in future.

5. Notwithstanding these difficulties, it should be recognized that the Fund’s financial structure relies on the ability and willingness of members with relatively larger quotas in the Fund to make larger financial contributions. As is evident from the data presented in this chapter, advanced countries, which have the majority of Fund quotas, and at times major oil-exporting countries have tended to provide the bulk of voluntary contributions in the past. Thus, as the quota share of EMDCs increases in line with their rising weight in the global economy, it can be expected that they will also play a more important role in contributing to the financing of the Fund. In this regard, the recent note purchase agreements committed by several EMDCs to support the Fund’s liquidity, on-going efforts to broaden the voluntary SDR trading arrangements, and the envisaged increase in EMDC participation in the reformed and expanded NAB represent notable developments in this direction.

B. Indicators of Members’ Financial Contributions to the Fund

6. The attached tables report details on a broad range of financial contributions that members provide to the Fund or in the context of Fund-related activities. For presentational purposes, these contributions are grouped into three main categories:

  1. resources provided by a member on a voluntary basis in support of the Fund’s general resources and the SDR department (Table I-1a; and Tables I-2–I-7);

  2. other voluntary resources provided by a member (Table I-1b; and Tables I-8–I-10); and

  3. contributions that are mandated by Fund policies (Table I-1c).

Table I-1a.

Summary of Voluntary Resources Provided through the GRA and SDR Department—by Member

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Republic of Yemen’s contributions include former contributions of Yemen Arab Republic and the People’s Democratic Republic of Yemen before their union in 1990.

Table I-1b.

Summary of Other Voluntary Resources—by Member

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As of January 7, 2010, the PRGF-ESF Trust was renamed PRGT. The PRGF-ESF Trust was previously known as ESAF (1987-1999), as PRGF (1999-2005), and as PRGF-ESF Trust (2006-2010) after the establishment of the ESF. All bilateral contributions to the original Trust in effect have remained there, with the exception of SDR 1.12 billion, which in 2006, at a request of bilateral contributors, was transferred to the MDRI-II Trust in support of the MDRI.

When the SCA-2 Administered Account was terminated in 1999, most of the refunds made to the membership were donated back as bilateral contributions to the IMF to help fund the Enhanced HIPC Initiative.

3/ Includes both GRA and Subsidy resources

Republic of Yemen's contributions include former contributions of Yemen Arab Republic and the People's Democratic Republic of Yemen before their union in 1990.

Table I-1c.

Summary of Contributions as Required by Fund Policies—by Member

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Republic of Yemen's contributions include former contributions of Yemen Arab Republic and the People's Democratic Republic of Yemen before their union in 1990.

Sources: Paid-In Quotas - Factsheet on IMF External Web http://www.imf.org/external/np/sec/memdir/members.htm. Financial Transaction Plan (FTP) Participation - Financial Transactions Plan and Use of and Borrowed Resources for the Period February–April 2010, including only members 1/22/2010, whose currencies were used under the FTP in GRA lending operations since January 1979. Implicit Interest on Unremunerated Reserve Tranche Positions - Finance Department. Surcharges (Level- and Time-Based) - Finance Department. Commitment Fees and Service Charges - Finance Department. Cumulative Burden Sharing Contributions - Review of the Fund’s Income Position for FY 2009 and FY 2010, 4/14/2009.
Table I-2.

Bilateral Loans and Note Purchase Agreements, as of January 28, 2010—by Member

(In millions of SDRs)

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Source: Finance Department.
1/

Exchange rate of December 7, 2009, was used to convert loan and Note Purchase Agreement amounts in SDRs:

EUR/SDR 1.07564. USD/SDR 1.59054.
Table I-7.

Voluntary SDR Trading Arrangements and Designation Plan Amounts, as of February 1, 2010—by Member

(In millions of SDRs)

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Source: Status of Voluntary SDR Trading Arrangements and SDR Designation Plan for the Period February–April 2010, 1/22/2010. 1/ The effective date for new and revised arrangements is the date of the general SDR allocation, i.e. August 28, 2009, or later.
Table I-8.

Summary of Bilateral Contributions and Loans Agreements PRGF-ESF, MDRI-II, ESF, and PRGF-HIPC Trusts and Liberia Debt Relief, as of June 30, 2009–by Member

(In millions of SDRs)

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Source: Update on the Financing of the Fund’s Concessional Assistance and Debt Relief to Low-Income Member Countries, 9/25/09.

As of January 7, 2010, the PRGF-ESF Trust was renamed PRGT. The PRGF-ESF Trust was previously known as: ESAF (1987-99), as PRGF (1999-2005), and as PRGF-ESF Trust (2006-10) after the establishment of the ESF. All bilateral contributions to the original Trust in effect have remained there, with exception of SDR 1.12 billion, which in 2006 at a request of bilateral contributors, was transferred to the MDRI-II Trust in support of the MDRI.

Excludes the G-8 commitment of SDR 100 million in end-2005 NPV terms, new ESF subsidy contributions, and any contribution made in the context of the LIC reform of 2009.

Amounts as of July 31, 2009.

When the SCA-2 Administered Account was terminated in 1999, most of the refunds made to the membership were donated back as bilateral contributions to the IMF to help fund the Enhanced HIPC Initiative.

Estimated values of total contributions include forthcoming contributions that are not yet received. The term “as needed” refers to the nominal sum of concessional assistance taking into account the profile of subsidy needs associated with PRGF lending and the provision of HIPC assistance, respectively.

Including interest earned in the Liberia Interim Administered Account from the early contributions made by several contributors prior to March 14, 2008.

Including pending contribution for those members.

Including additional loan commitments for interim PRGF operations.

A fourth borrowing agreement with the Agence Francaise de Developpement (AFD) in the amount of SDR 670 million became effective on August 20, 2009.

Before April 17, 1998, known as Caisse Francaise de Dveloppement.

In late 1999, the Bank of Italy replaced the Ufficio Italiano dei Cambi as lender to the PRGF Trust.

On October 1, 1999, the Export-Import Bank of Japan merged with the Overseas Economic Cooperation Fund and became the Japan Bank for International Cooperation.

The original loan commitment of the Bank of Spain was SDR 220 million; however, only SDR 216.4 million was drawn and disbursed by the expiration date for drawings.

The full loan commitment of SDR 200 million was drawn in January 1989; this amount was fully disbursed to borrowers by March 1994.

The loan commitment is for the SDR equivalent of US$50 million.

Any mismatch of outstanding resources between the amount owed by PRGF borrowers and the amount owed to PRGF lenders arises because of mismatches in timing between drawdowns from lenders to the Trust and disbursements of PRGF loans to borrowers.

On August 26, 1998, the SFD indicated that it did not intend to make further loans in association with the PRGF.

Reflecting net investment income (in end-2005 NPV terms) to be generated from investment/deposit agreements.

Table I-10.

Technical Assistance Contributions to Bilateral and Multidonor Administered Accounts, as of April 30, 2009–by Member

In millions of US dollars)

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Source: Financial Statements FY 2009 and OTM Internal Records. Note: This table reflects member contributions from bilateral and multilateral donors, and it does not include contributions from international organizations.
Table I-3.

GAB and NAB Participants and Credit Amounts, as of April 30, 2009—by Member

(In millions of SDRs)

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Source: Review of the Adequacy of and Options for Supplementing Fund Resources, 1/12/2009. Note: The maximum amount of resources available to the IMF under the NAB and GAB is SDR 34 billion.

SDR equivalent as at October 30, 1982.

250,000 million yen entered into effect on November 23, 1976.

Total may not equal sum of components due to rounding.

Table I-4.

Supplementary Financing Facility and Supplementary Financing Facility Subsidy Accounts - Borrowing in Connection with Purchases and Repayment to Lenders, as of April 30, 1987—by Member

(In millions of SDRs)

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Sources: 1983 Annual Report, Table 30 (page 105) and 1987 Annual Report, Table II.11 and Table II.16 (pages 86 and 93). Note: The Supplementary Financing Facility enabled the Fund to provide supplementary financing under standby and extended arrangement in conjunction with the use of the Fund’s ordinary resources.

The Supplementary Financing Facility Subsidy account was established in December 1980 to reduce the cost for low-income developing members of using the supplementary financing facility.

Loan commitments to Supplementary Financing Facility Subsidy Account.

Claims totaling SDR 172.01 million uwere transferred by the Deutsche Bundesbank to the Saudi Arabian Monetary Agency against U.S. dollars on November 13, 1980.

Claims totaling SDR 8.36 million were repaid in advance to the Banco de Guatemala on February 8, 1982. This encashment was refinanced by a call on the Swiss National Bank.

Claims totaling SDR 69.85 million were repaid in advance to the Central Bank of Nigeria on April 8 and 9, 1982. This encashment was financed by calls in equal amounts under the supplementary financing facility borrowing agreements with Japan and the United States, in agreement with these lenders.

US$52 million valued at the exchange rate of SDR 1 equals US$0.924527 as of April 29, 1983.

Table I-5.

Enlarged Access Facility, as of April 30,1987—by Member

(In millions of SDRs)

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Source: Borrowing by the Fund - A Chronological Review, 7/25/95. Note: The Enlarged Access Policy to Fund Resources was established on March 11, 1981 to provide assistance to members facing payment imbalances that are large in relation to their quotas and needed resources in larger amounts and for longer periods that were available under the regular credit tranches until the Eight general Review of Quotas became effective.
Table I-6.

Oil Facility and Oil Facility Subsidy Accounts—Borrowing in Connection with Purchases and Repayments to Lenders, as of April 30, 1983—by Member

(In millions of SDRs)

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Sources: 1983 Annual report, Table I.9 and Table 28 (pages 125 and 103). Note: The oil facilities of 1974 and 1975 were established to assist Fund members that experienced balance of payments needs attributable to the rise of oil prices. Contributions are for the period of September 4, 1974-April 30, 1983. The oil facility subsidy account was established in August 1, 1975 to assist Fund members most seriously affected by oil price increases to meet part of the cost of using the resources of the 1975 oil.
Table I-9.

Emergency Assistance—Subsidy Contributions —by Member, as of July 31, 2009

(In millions of SDRs)

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Source: Update on the Financing of the Fund’s Concessional Assistance and Debt Relief to Low-Income Member Countries, 9/25/09.

For contributions which have been fully received, the SDR equivalent is the actual SDR amount received using the exchange rate on the value date. For contributions that are not yet disbursed, the SDR equivalent is calculated using the exchange rate at end-July 2009.

Reflecting investment income to be generated on a deposit agreement, effective May 2006.

To subsidize the rate of charge on purchases by Sri Lanka and Maldives under ENDA following the 2004 tsunami.

Existing contribution, previously earmarked for ENDA.

Existing contribution, previously earmarked for EPCA.

The focus of this chapter is on members’ voluntary contributions but, as summarized in Table I-1c, members also contribute in a variety of ways as required under Fund policies.

7. As the data illustrate, contributions come in very different forms and are not easily comparable across different categories and time periods. The detailed tables report data in nominal values and often cover different time periods, depending on the particular contribution and data availability. Aggregation of these contributions across time would require a view on appropriate discount factors; in the few instances where aggregate data is reported (such as for cumulative contributions to the Fund’s concessional lending facilities), the nominal values are summed across different periods without discounting, in line with other published sources.

8. While all members contribute resources to the Fund, there are substantial differences across the membership in terms of the level and areas of contributions (see summary Tables I-1a–I-1c). Differences across the membership are especially marked for financing of the Fund’s concessional lending activities and of its borrowing. While actual quota shares have at times been used as a basis for seeking contributions from members with sufficiently strong balance of payments positions, the historical data illustrates substantial differences in support across the Fund’s membership in relation to quota shares. For example, loan contributions to the PRGT (and its predecessors) have been limited so far to only 14 members, with a few providing particularly generous resources relative to their Fund quota. The data also illustrate some evolution in contributions across the membership over time. Thus, while advanced countries and at times oil-producing countries have tended to cover the bulk of voluntary contributions, the recent borrowing and note purchase agreements with several emerging market countries constituted an important expansion of the group of contributing members.

Several specific data issues arise in the context of members’ contributions to the Fund:

  • Data sources and data gaps. Except for the summary tables, which indicate whether or not a member contributes in a particular area, data sources are listed in the footnotes to each of the attached tables. The data in this chapter are limited to those that are not confidential and the sources are published official documents, the external web, or online data bases.

  • Data periods and units. The periods of coverage and units for the data reflect typically the standard reporting format; for example, some information is reported for fiscal years rather than calendar years; some in US dollars rather than SDRs. Similarly, the period covered varies across the different data series—this reflects that some data are limited to specific sub-periods (e.g., because the instrument that was funded by members’ contributions existed only for a limited time period) while for other data time periods correspond to those in a readily available data base.

II. Dynamic Emerging Market and Developing Countries: Conceptual Issues

This chapter considers alternative approaches to capturing dynamic EMDCs, a key focus of the IMFC’s call for quota realignment.1 Different approaches to capturing the concept of dynamic EMDCs are possible. One approach would be to equate dynamism with under-representation using the quota formula. At the same time, the IMFC’s reference to dynamic EMDCs, and not just to under-represented ones, would suggest that consideration be given to a broader approach. Such an approach could also capture some EMDCs that, while currently over-represented using the quota formula, are unlikely to remain so after a relatively short time period—provided they meet certain criteria. Three alternative criteria are discussed in this chapter and the attached tables present preliminary results.

1. Three alternative approaches to capturing dynamism are considered. The criteria considered include: (i) above average GDP growth; (ii) contribution to global economic growth; and (iii) PPP GDP out-of-lineness. As discussed in the main text, the rationale for considering these approached reflects considerations that were also recognized in the 2008 reform, i.e., criteria that could serve as a means of bringing forward expected growth for countries whose dynamism is not yet fully reflected in their calculated quota shares, which are based on historical data. The rationale is most relevant for countries that, while possible over-represented using the formula, are not over-represented by wide margins. For illustrative purposes, the results presented below limit therefore the criteria to countries that are not over-represented by more than 25 percent,2 but alternative thresholds could also be considered. In all cases, results are presented both for data through 2007 based on the current quota database and for data through 2008 using the derived data set presented in the main paper.3

A. Above Average Real GDP Growth

2. One approach to capturing dynamism is to consider a country’s relative real GDP growth over time. A country that has been growing at above average rates is likely to see its weight and role in the global economy increase in the future, given the considerable persistence that it typically observed in relative growth rates across countries. Applying this criterion required a view on the threshold growth rate to be used for including countries in this group. In light of the IMFC’s focus on EMDCs that are dynamic, the most relevant threshold would seem to be the average growth rate for EMDCs as a group.4 Alternatively, a lower threshold of average world (rather than EMDC) growth could be considered, which would cover a fairly long list of EMDCs.

3. There is also a need to specify the interval over which the growth rate is to be assessed. It is recognized that the choice of a reference period is to some extent arbitrary, and this chapter reports results for two scenarios: a period of 10 years, which provides a reasonably long horizon to measure sustained growth; and a shorter period of 5 years, which captures more recent cases of dynamism. The period chosen would need to be long enough to reflect more than just a temporary burst of strong growth, such as a recovery from a crisis. On the other hand, several EMDCs have been affected by crises at some point in the last decade, so choosing too long a period can also distort the results. The list of countries is sensitive to the period chosen. For example, Albania, Bahrain, Cape Verde, Estonia, Lithuania, Maldives, and Russia had above average EMDC growth over the recent 10-year (but not the 5-year) period, while Panama, Peru, and Slovak Republic would drop out when a 10-year (rather than the 5-year) period is considered (left panels of Tables II-1 and II-3).

Table II-1.

Alternative Measures of “Dynamic” EMDCs: Data through 2008

(Shaded if criteria are met)

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AQS refers to Actual Quota Share (post-second round quota share); CQS refers to Calculated Quota Share.

Constructed using Gross Domestic Product, in constant price (local currency) from World Economic Outlook, October 2009 publication, for 179 member countries. Data are preliminary.

Average share of a country in PPP-GDP during 2004-2008 times average real GDP growth during the same time period. The product is then normallized to sum up to 100. PPP-GDP share is constructed using PPP valuation of GDP from World Economic Outlook, October 2009 publication, for 179 member countries. Data are preliminary.

PPP-GDP share is constructed using PPP valuation of GDP WEO October 2009 publication.

Includes China, P.R. and Hong Kong SAR. Growth rate is calculated as a weighted average of real GDP growth, using PPP-GDP shares as weights.

Table II-3.

Alternative Measures of “Dynamic” EMDCs-Above Average Real GDP Growth: a 10 Year Period

(Shaded if criteria are met)

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AQS refers to Actual Quota Share (post-second round quota share); CQS refers to Calculated Quota Share.

Constructed using Gross Domestic Product, in constant price (local currency) from World Economic Outlook, October 2009 publication, for 179 member countries.

Includes China, P.R. and Hong Kong SAR. Growth rate is calculated as a weighted average of real GDP growth, using PPP-GDP shares as weights.

4. Applying the criterion of a growth rate above the EMDS average over the past 5 years would capture 21 EMDCs, using the derived data set through 2008. This includes 15 EMDCs that are under-represented, as measured by their post-2008 reform quota shares relative to their calculated quota shares. It also includes 6 EMDCs that are at most moderately over-represented (i.e., by less than 25 percent): Belarus, Cambodia, Ethiopia, India, Panama, and Uganda (see shaded rows in the left panel of Table II-1). For comparison, shifting the period to 2003-2007 would result in a slightly longer list, covering 23 (shaded rows in the left panel of Table II-2).

Table II-2.

Alternative Measures of “Dynamic” EMDCs: Data through 2008

(Shaded if criteria are met)

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AQS refers to Actual Quota Share (post-second round quota share); CQS refers to Calculated Quota Share.

Constructed using Gross Domestic Product, in constant price (local currency) from World Economic Outlook, October 2009 publication, for 179 member countries. Data are preliminary.

Average share of a country in PPP-GDP during 2003-2007 times average real GDP growth during the same time period. The product is then normallized to sum up to 100. PPP-GDP share is constructed using PPP valuation of GDP from World Economic Outlook, October 2009 publication, for 179 member countries. Data are preliminary.

PPP-GDP share is constructed using PPP valuation of GDP from quota data updated to 2007.

Includes China, P.R. and Hong Kong SAR. Growth rate is calculated as a weighted average of real GDP growth, using PPP-GDP shares as weights.

B. PPP-Weighted Contribution to Real Global GDP Growth

5. An alternative approach could be based on a country’s contribution to global growth. This metric was considered, but not pursued, in the 2008 reform as a possible approach to address the goal in the April 2007 IMFC Communiqué of increasing the share of the Fund’s most dynamic members.

6. The contribution measure is calculated as the average share of a country in PPP-based global GDP times its average annual real GDP growth during a certain period. A country could be included in the group of “dynamic” EMDCs if its contribution to PPP-weighted real global GDP growth during a particular period is above a certain threshold. In the 2008 reform discussions, a 5-year interval and a threshold of 0.5 percent for the contribution to growth were considered.

7. Measures based on contributions to global growth tend to capture mainly the size of an economy and omit a number of fast-growing EMDCs. Constructing a measure based on the approach considered in the 2008 reform and using the derived data set through 2008 would cover 20 EMDCs (shared rows in the middle panel of Table II-1), including the large economies of Brazil, China, India, and Russia, and 3 EMDCs that are moderately over-represented as measured by the quota formula (India, Pakistan, and Romania).5 However, such a measure would not capture the eight fastest growing economies during this period, which all have a relatively small weight in the world economy.

C. PPP GDP Out-of-Lineness

8. A third approach, closely following the one adopted in the 2008 reform, captures countries that are most out-of-line in terms of their PPP GDP.6 Under the 2008 reform, under-represented EMDCs whose shares in global PPP GDP were substantially larger than their actual pre-Singapore quota shares (by more than 75 percent) received a minimum nominal quota increase of 40 percent from their pre-Singapore level. The rationale cited at that time was “to give additional recognition to dynamism by bringing forward expected future growth for those countries that are most out-of-line in terms of PPP GDP.”7

9. The list of countries covered by this criterion would depend on the chosen threshold. For example, one could include all EMDCs whose share in global PPP GDP exceeds their post-2008 reform quota share; alternatively, and similar to the approach used in the 2008 reform, the list could be narrowed and include only countries that are out-of-line by at least a certain margin, based on this criterion. For illustrative purposes, the attached tables show results using cut-off ratios of 1.0, 1.5, and 1.75. The application of these selection criteria, using the derived data set for 2006-2008 and a cut-off ratio of 1.0, includes 33 EMDCs, 6 of which are moderately over-represented: Belarus, Cambodia, Ethiopia, Guatemala, India, and Pakistan (shaded in the right panel of Table II-1. A cut-off ratio of 1.5 captures 11 EMDCs (China, Turkey, India, Iran, Colombia, Vietnam, Ethiopia, Brazil, Egypt, Nepal, and Mexico);8 and a cut-off ratio of 1.75 for PPP GDP yields only 6 EMDCs (China, Turkey, India, Iran, Colombia, and Vietnam).9

1

See Quotas and Voice—Further Considerations, (9/2/05), page 15 and Box 3.

2

See Quotas—Further Thoughts on a New Quota Formula (11/22/06).

3

For a recent discussion of some practical issues involved in including financial contributions in the quota formula, see A New Quota Formula—Additional Considerations, (3/14/07), pages 14–15.

1

Communiqué of the International Monetary and Financial Committee of the Board of Governors of the International Monetary Fund (Press Release No. 09/347, 10/4/09).

2

i.e., the ratio of post-second round quota share divided by calculated quota share is less than 1.25.

3

Since real GDP data are not included in the quota database, data series for 170 member countries were taken from the World Economic Outlook database published in October 2009. 7 countries (Iraq, Kosovo, Marshall Islands, Micronesia, Palau, San Marino, and Serbia) that did not have WEO data are excluded from the preliminary results presented in this Chapter.

4

Consistent with the methodology of the WEO, average GDP growth rates for country groups are defined as a PPP-GDP weighted average of individual countries’ GDP growth rates. lower threshold of average world (rather than EMDC) growth could be considered, which would cover a fairly long list of EMDCs.

5

For comparison, Quota and Voice Reform-Stocktaking and Further Considerations (7/11/07) showed that using this criterion over the period 2001-2005 would cover 13 EMDCs.

6

Defined as the average of value of PPP GDP over the past 3 years, as used in the formula, relative to its actual post-second round quota share.

7

See The Report of the Executive Board to the Board of Governors, (03/28/08), para. 9. In earlier discussions of the 2008 reform, a cut-off ratio of 1.5 was considered for a filter to be used in conjunction with a linear quota formula that did not incorporate PPP GDP (SM/07/326). Subsequently, a higher cut-off ratio of 1.75 was proposed (Quota and Voice Reform—Key Elements of a Potential Package of Reforms (2/26/08), given that the agreed quota formula already includes a significant element of PPP GDP.

8

For comparison, Quota and Voice Reform-Key Elements of a Potential Package of Reforms (2/26/08) showed that during 2003-2005 13 EMDCs satisfied these criteria (Korea, Turkey, China, Equatorial Guinea, Thailand, Turkmenistan, Bhutan, Vietnam, Brazil, Philippines, India, Indonesia, and Colombia.

9

For comparison, Quota and Voice Reform-Key Elements of a Potential Package of Reforms (2/26/08) showed that, during 2003-2005, 7 EMDCs satisfied these criteria (China, Korea, Turkey, India, Brazil, Vietnam, and Mexico).

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Cover Policy Papers
Fourteenth General Review of Quotas - Realigning Quota Shares - Initial Considerations
Author:
International Monetary Fund
Volume/Issue:
Volume 2010: Issue 017
Publisher:
International Monetary Fund
ISBN:
9781498337762
ISSN:
2663-3493
Pages:
149
DOI:
https://doi.org/10.5089/9781498337762.007