November 10, 2010

Dear Colleagues in the Fourth Pillar,

The following message is what I received with the request to share with all who participated in and supported the Fourth Pillar process for collecting Civil Society input on IMF governance reform. There has been some progress on quota and voice, but much remains on the entire accountability agenda.

Warm regards,

[Click here to view a pdf of this letter ]

November 10, 2010

Dear Ms. Griesgraber,

In the attached letter to you and your colleagues I express my appreciation for the Work of civil society and think tank analysts in helping to achieve the latest round of IMF governance reforms. I hope that the letter can be circulated by New Rules to all of the groups and individuals that participated in the Fourth Pillar.

At the same time, I would like to offer my gratitude to you personally for all that you have done in this area. Your unrelenting focus on IMF reform is greatly appreciated. I know that the Fourth Pillar was at times a source of frustration for you, in part because it was not always possible for us to communicate how your efforsts were influencing the reform process. Please allow me to assure you that your work had a significant impact; the voice of civil society was a persistent reminder to the membership that there were expectations for reform that transcended the institution.

I am sure that you feel that the reform effort needs to go further in many areas. Indeed, this work is a long-term process requiring continued effort and energy for many years to come. However, I believe that this step should allay the concerns about IMF legitimacy. I have no doubt that we will continue to hear from you on these issue, and I expect that we will offer a constructive and collegial response.

[Click here to view a pdf of this letter ]

November 10, 2010

Dear Ms. Griesgraber,

I am very pleased to let you know that we have reached an agreement in the IMF Executive Board that promises to transform the fund into a more effective and legitimate multilateral institution. With this important development in mind, I am writing to express my great appreciation for the hard work and cooperation that you and your civil society colleagues from the Fourth Pillar have contributed to IMF governance reform.

As you know, the governance negotiations took a major step forward during the G-20 Finance Ministers meeting in South Korea last month. That progress has been built upon by the IMF Executive Board—representing all 187 member countries—with last week’s agreement on a reform blueprint that will go to the Board of Governors for final approval.

The core of the reforms will be a doubling of IMF quotas that will produce a shift of over 6 percent in quota shares to dynamic emerging market and developing countries. About 80 percent of that shift will come from the shares of advanced and oil-producing economies. Brazil, China, India, and Russia will all be among the Fund’s top 10 shareholders. In addition, the voice of the poorest developing nations within the IMF will be maintained by preserving their quota and voting shares. Overall, 110 countries will gain or maintain quota share, of which 102 are emerging market and Developing countries.

Once all the reforms are in place, this rebalancing will be mirrored in the IMF Executive Board, where the advance European economies will hold tow fewer seats. All Executive Directors will be elected. The Executive Board endorsed a timeline that calls for the quota increases and realignments to take effect by the IMF-World Bank Annual Meetings in October 2012, and the Executive Board reforms to be completed by the Board elections scheduled for late 2012.

This is a balanced package achieved through difficult negotiations. As suich, it is a tribute to the international community’s commitment to compromise. But it also is recognition by our members that reform has been profoundly important to other stakeholders. Civil society and think tanks—as exemplified by the Fourth Pillar—have influenced the debate.

Governance reform is an ongoing process. There are many other issues left to resolve, and the IMF is committed to a continuing reform process. Your contributions to the effort have been extremely important. I look forward to working with you in the future.