When a country joins the IMF, it is assigned an initial quota in the same range as the quotas of existing members of broadly comparable economic size and characteristics. The IMF uses a quota formula to help assess a member’s relative position.
The current quota formula is a weighted average of GDP (weight of 50 percent), openness (30 percent), economic variability (15 percent), and international reserves (5 percent). For this purpose, GDP is measured through a blend of GDP—based on market exchange rates (weight of 60 percent) and on PPP exchange rates (40percent). The formula also includes a “compression factor” that reduces the dispersion in calculated quota shares across members.
Quotas are denominated in Special Drawing Rights (SDRs), the IMF’s unit of account. The largest member of the IMF is the United States, with a current quota (as of March 2017) of SDR82.99 billion (about US$113 billion), and the smallest member is Tuvalu, with a quota of SDR2.5 million (about US$3.4 million).
The conditions for implementing the quota increases agreed under the 14thGeneral Quota Review were met on January 26, 2016. As a result, the quotas of each of the IMF’s 189 members will increase to a combined SDR477 billion (about US$652 billion) from about SDR238.5 billion (about US$326 billion). As of March 2017, 179 of the 189 members had made their quota payments, accounting for over 99 percent of the total quota increases, and total quotas stood at SDR475 billion (about US$650 billion).
A member’s quota determines that country’s financial and organizational relationship with the IMF, including:
Subscriptions. A member’s quota subscription determines the maximum amount of financial resources the member is obliged to provide to the IMF. A member must pay its subscription in full upon joining the IMF: up to 25 percent must be paid in SDRs or widely accepted currencies (such as the US dollar, the euro, the Japanese yen, or the British pound sterling), while the rest is paid in the member’s own currency.
Voting power. The quota largely determines a member’s voting power in IMF decisions. Each IMF member’s votes are comprised of basic votes plus one additional vote for each SDR100,000 of quota. The 2008 reforms fixed the number of basic votes at 5.502 percent of total votes. The current share of basic votes in total votes represents close to a tripling of their share prior to the implementation of the 2008 reforms.
Access to financing. The amount of financing a member can obtain from the IMF (its access limit) is based on its quota. For example, under Stand-By and Extended Arrangements, a member can borrow up to 145 percent of its quota annually and 435 percent cumulatively. However, access may be higher in exceptional circumstances.
