This article is written by: Ousmene Mandeng.
The IMF is the only formal arrangement for multilateral economic policy cooperation, but representation at the IMF, expressed through so-called quota shares, is no longer aligned with economic realities. This reduces countries’ incentives to engage constructively with the existing system. Any debate about change ought to see China’s quota share increase significantly. A necessary condition thereof is a reduction in the shares of the European Union countries.
International trade is stagnating and there have been more than 3,000 trade restrictions in 2023 or more than five times than in 2015. It is a proxy for the decline of the multilateral system.
The IMF has long recognized the need for a realignment of quota shares to preserve the legitimacy of the institution. Since at least 1998, the IMF has embarked upon a review of the framework guiding the distribution of quota shares. There had been multiple adjustments, but overall change has been small.
About the Author: Ousmène is a German economist and entrepreneur and focuses on the adoption and dissemination of digital monies and assets. He runs boutique advisory firm Economics Advisory that has been working mostly with Accenture supporting Accenture’s campaign globally for the origination and delivery of digital money projects including central bank digital currency (CBDC) projects Jura, Khokha 2, E-Krone, mBridge, Digital Euro.