Maureen O'Sullivan (Dublin Central, Independent)

This technical Bill will make two key amendments to the proposed voice and participation voting weight and the funding arrangements for the IMF's investment authority. The IMF has been responsible for seriously damaging the lives of people in poorer and developing counties. I hope this country will not suffer the same fate.

It is claimed the voting formula contained in the voice and participation amendment aims at a better approximation of voting weight to economic weight meaning some under-represented developed countries will gain weight and some developing nations could lose. It is disappointing, as some organisations have pointed out, that after years of debate the proposal only gives a small increase in quota share for a handful of developing countries and none for the rest of them. This proposal does not represent the long overdue reform that was promised. Yet the EU's position paper in supporting it claims "it will achieve a significant shift with the representation of dynamic economies, many of which are emerging market countries, and give poorer countries a greater say in running the multilateral institution". Where is the truth?

The issue of governance reform has been a long-standing controversy between IMF member countries. Many justice organisations across the world have repeatedly called for a more just allocation of representation to southern hemisphere countries in the IMF, an institution that has often devastated their economies with its policy conditions attached to lending. Debt and Development Coalition Ireland has produced several reports on this damage. The IMF itself has acknowledged the need for governance reform, including increasing the voice of weaker countries in IMF decision-making structures. To date any changes agreed have been almost meaningless and impoverished countries do not have real power. There is a definite governance imbalance in the IMF. Reforms will not occur through marginal increases in voting rights.

The IMF has categorised South Korea and Singapore as developing countries, benefiting from the shift despite an IMF report classifying them as advanced economies. Another commitment the IMF can make in reforming its governance structure must include a far greater voice and vote for southern hemisphere countries through introducing a double-majority voting system, two separate majorities, one based on one country, one vote and the other on equally weighted quotas. This will allow southern countries to have a meaningful role in decision-making with increased dialogue between members which could result in more stable and effective decisions. Impoverished countries in the past have been ruined by the IMF. Now is the chance to put that right.

Regarding the proposed investment authority amendment, I note one provision concerns when the IMF sells gold.

To where will the proceeds go? I am informed that an amount will be placed in a general resources account and that the excess will be placed in an investment account. The IMF completed the sale of 403.3 tonnes of gold in December 2010 and obtained a far higher return on that sale than would normally be the case. In 2009, the IMF had agreed to use $900 million of the profit from such sales toward increasing low-interest lending to low-income countries. However, global debt justice movements have long been calling for the proceeds from these gold sales to be used to fund debt cancellation for southern nations, which is very much needed. Reputable research carried out in 2009 indicates that at least 100 countries still require approximately $400 billion in debt cancellation.

How was such a high level of profit made from the IMF's recent gold sales? It is suggested that said profits amounted to as much as $2.5 billion. The southern countries to which I refer have been used, exploited and drained of their wealth for a very long period by their European imperial masters. Immediate action is needed to alleviate the debt burden on countries of the global south. Some NGOs working on debt issues recommend support for the Bill, while noting that it does not address any of the fundamental concerns relating to reform of the IMF. There is a need to call for significant new commitments from the latter in respect of gold sales. Any windfall profits from such sales should be allocated to additional debt cancellation in respect of the most impoverished countries.

There is also a need to address the issue of the IMF's practice of attaching policy conditions to loans, a matter in respect of which we have had some experience in recent times. Questions arise with regard to the IMF's competence in working with southern countries. For example, does it have a real understanding of the economies of such countries? There is a need for just and responsible financing when it comes to international lending and borrowing. I stress the word "just" in this regard. The proposed increased investment authority for the IMF should not be for internal costs but should rather be directed towards other priorities such as debt cancellation.

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