Emerging economies, including China and India, were given a greater voice at the World Bank, as member nations approved a slight shift of voting shares in favour of developing countries, while agreeing to raise more money for global aid.
The World Bank and The International Monetary Fund concluded their annual spring meeting here by increasing the voting rights of India, China and Brazil, among others, thus giving them more say in the institutions' functioning.
This represents a total shift of 4.59 per cent to developing and transition countries since 2008, the IMF and the World Bank said in a joint communique after the meeting.
As a result, India's voting power increased from 2.77 per cent to 2.91 per cent while China whose rights increased from 2.77 per cent to 4.42 per cent was the biggest benefactor.
The shift places India at the seventh biggest place after the United States (15.85 per cent), Japan (6.84 per cent), China, Germany (4 per cent), France (3.75 per cent) and the United Kingdom (3.75 per cent).
"The change in voting-power helps us better reflect the realities of a new multi-polar global economy where developing countries are now key global players," said World Bank President Robert B Zoellick.
The change gives emerging nations more say in how the bank is run and how its funds are disbursed.
"This change in voting share, giving developing countries over 47 per cent, is a significant step," he told reporters in Washington, hoping shareholders will review the approach in 2015.
Membership of the financial institution gives certain voting rights that are the same for all countries, but there are additional votes which depend on a country's financial contributions to the organisation.
Zoellick said at a time when multilateral agreements between developed and developing countries have proved elusive, this accord is all the more significant.
This increase fulfils the Development Committee commitment in Istanbul in October 2009 to generate a significant increase of at least 3 percentage points in Developing and Transition Countries voting power.
"We, in calculating this, looked at size of the world economy, using purchasing power but also exchange rate measures, but also, as a development institution, the contribution to development, including the contribution to IDA, our fund for the poorest".
The governments also approved over $90 billion in extra money for the World Bank's various arms that provide aid and capital to member countries.
Zoellick said the shift in voting powers was designed to try to reflect past contributions, citing the example of Japan that has been "a very gracious contributor".
Zoellick added the change was also 'to encourage new ones, including for some of the developing and transition countries'.
The 186 countries that own the World Bank Group also endorsed boosting its capital by more than $86 billion for the International Bank for Reconstruction and Development, the arm that lends to developing countries.
The increase would come from a general capital increase and a selective capital increase linked to the change in voting-powers, including $5.1 billion in paid-in capital.
It further agreed on a $200 million increase in the capital of the International Finance Corporation, World Bank Group's private sector arm, as part of an increase in shares for developing and transition countries.
IFC will also, subject to board approval, consider raising additional capital through issuing a hybrid bond to shareholding countries and through retaining earnings.
The IBRD 2010 realignment will result from a selective capital increase of $27.8 billion, including paid-in capital of $1.6 billion.
An increase in the voting power of DTCs at IFC to 39.48 per cent -- a total shift of 6.07 percentage points.
The IFC 2010 realignment will result from a selective capital increase of $200 million and increase in the basic votes for all members.
Noting that this represent a dynamic transformation for the World Bank Group, Zoellick said the additional capital means that the bank will no longer face the possibility that it would have to cut back its lending later this year.
"We came into this crisis well capitalised thanks to sound financial policies. We have provided a record $105 billion in financial support since the crisis began to bite in July of 2008.
"This additional capital means that we will be able to continue to play the role that is demanded of us," he said.