Worse still, the IMF's quotas cannot accurately mirror today's international economic landscape. Calculated based on variables including a country's national income, gold and dollar reserves and foreign trade volume with certain weights added, the quotas tend to exaggerate developed countries' influence on the world economy. Thus, developed countries have wound up monopolizing the fund's decision-making processes.

The United States, for example, pockets 16.77 percent of the IMF's total votes, gaining a de-facto veto power over the most important matters. At the same time, the Group of Seven industrialized Western countries—whose votes account for about 45 percent of the total—can easily call the shots on all major issues.

By contrast, the burgeoning economic might of developing countries and emerging economies—such as China, Brazil and South Korea—in recent years has yet to be translated into votes.

In fact, the contribution of creditor nations in the developed world to the IMF plummeted to 23 percent in 2004 from a previous 72.3 percent—whereas debtor nations in the developing world are contributing more to the fund. The IMF, however, has failed to accommodate this dramatic change.

It should likewise be noted that, while Asia possesses more than $3 trillion in foreign exchange reserves, Japan, China and India combined do not have as many votes as the United States alone or half as many as the European Union.

This unfair distribution of voting power has rendered the IMF inefficient in representing its members. This has equated into the prime reason for its sinking credibility.

The IMF shoulders a pressing task to curb the excess money supply of its members—especially issuers of international reserve currencies, while shaping a new international monetary system.

Given this commitment, it should make great efforts to redistribute its quotas and votes to instill a more democratic internal governance structure. These efforts are also essential for the IMF to rebuild its shattered reputation.

Toward greater democracy

The IMF is expected to represent the interests of all its members in a fair and equitable manner. That's because it will not be able to accomplish its mission to establish a new international monetary system unless it wins universal trust and support.

In May 2008, IMF members adopted a reform plan aimed at making the fund a better representative of their interests. At the Summit of the Group of 20 (G20) major economies in Pittsburgh in September, leaders agreed to increase the quota share to dynamic emerging economies and developing countries at the IMF by at least 5 percent.

At their most recent meeting in Britain in early November, meanwhile, G20 financial ministers and central bank governors reiterated that the transfer of quotas and votes to emerging markets and developing countries should be a priority of the IMF's reforms.

WTO Deputy Director General Alejandro Jara said the financial crisis calls on the international community to speed up cooperation and strengthen oversight, especially financial regulation. All countries should be subject to the same discipline, he added.

In fact, all countries should realize that an orderly international monetary system serves their fundamental interests. Against the backdrop of grave global challenges such as environmental degradation, nuclear proliferation and the economic crisis, both industrial and developing countries alike should take a moral high ground and work together on every issue.

Moving forward, the IMF should allocate quotas and votes more equitably among developed countries, emerging economies and developing countries.

For one thing, it should grant quotas in proportion to its members' economic power. That is, the IMF needs to adjust the quotas in a bid to adapt to the growing shares of developing countries and emerging economies in the world economy.

If the IMF wants these countries to undertake greater international obligations and join its efforts to forge a new international monetary system, moreover, it must give them more quotas and a greater voting power.

Rather, the IMF should ensure no country or countries have an overwhelming voting power to avoid power monopoly.

Lastly, it should tilt in favor of developing countries while allocating quotas. In other words, the fund should strike a balance between taking economic power as the major index and respecting the right of underdeveloped countries to make their voices heard.

The author is an associate professor with the School of Law at the University of International Business and Economics in Beijing