The UK should offer to give up IMF seat at G20

March 31, 2009

Several months ago I was asked to participate in a conference being hosted by the British think tank, Chatham House, to generate ideas for G20 leaders for the London Summit, which will take place on Thursday.  The mandate we were given was to write a very short (3,000 word) piece that made a tangible proposal about the area we were assigned to for incorporation in the summit agenda.  I was asked to write on IMF reform, one of the themes of the upcoming summit.

My proposal was that the UK government voluntarily give up its chair on the Executive Board of the IMF.  I argued that there were a number of reasons to do so, despite the obvious political difficulties.   This included using the G20 to focus on something they had a proven track record (IMF reform), focusing the summit on global governance reform, allowing the UK to shape the debate about representation of Europe in the IMF going forward, etc.

The idea proved not only to be provocative (which I expected), but also popular (which I did not).  It attracted a quite a bit of attention at the seminar itself, and in subsequent G20 discussions, and became the leading idea presented by Chatham House in their press release about the report.

As such, it was picked up quite broadly, and I have been fielding media requests to talk about the idea, and about the summit more generally, since Chatham House announced the release of the report on Friday.

While I am almost 100% sure that the UK will not offer to give up its single seat on the IMF board on Thursday (though I would love to be wrong about this), I still think that the idea has merit.  The G20 summit has been massively hyped, and there is very little agreement between even the US and Europe about what should be in the communique.   That is in part because the G20 is not the right context to be making promises about new regulatory frameworks or coordinated fiscal action – in part because of the diversity of the membership.  But it is definitely the right place to talk about righting global governance to take into account the increasing importance of developing countries – because of the diversity of the membership –  and to reduce / consolidate the over-representation of Western, and particularly European, players in institutions like the IMF.

Conveniently, addressing this global governance issue also goes some way to help solving the problem of how to find more funding for the IMF at this critical moment.   With a bit of flexibility from the UK about the future configuration of voice at the IMF, they may be able to secure the sort of massive increases in IMF reserves the US and Europe has been calling for, as China and other developing countries may be willing to put forward more funds.

And of course it prevents the summit from looking like a complete waste of time, which is not likely, but is possible, if tangible points of agreement cannot be reached.


One Response to “The UK should offer to give up IMF seat at G20”

  1. […] the summit,  a self-described “curve ball” by asking whether the UK would consider giving up its seat in the IMF at tomorrow summit, acknowledging that I was sitting in the audience.  Lord Malloch-Brown said […]

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