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IMF again urges US to ratify quota reform

Published:Wednesday | October 22, 2014 | 12:00 AM
IMF Managing Director Christine Lagarde. File

Mcpherse Thompson, Assistant Editor - Business

The International Monetary Fund (IMF) has again urged the United States Congress to ratify quota and governance reforms agreed in 2010 to further strengthen the representation of emerging economies and enhance the participation of low-income countries.

Managing director of the IMF, Christine Lagarde, said the reforms, due to be ratified in 2012, was long overdue and she hoped the Barack Obama administration will act to ensure that it happens.

The United States, the largest member of the IMF with a current quota of SDR 42.1 billion (about US$65 billion), must ratify the package of reforms for it to enter into effect.

The International Monetary and Finance Committee said if that is not done by year-end, it would devise alternatives.

"We are deeply disappointed with the continued delay in progressing the IMF quota and governance reforms agreed to in 2010," said the Committee, a ministerial advisory body to the board of the IMF, in a communiqué at the Fund's annual meeting in Washington, DC recently.

Restating what is said in April this year, the Committee, chaired by Singapore's Deputy Prime Minister and Minister of Finance Tharman Shanmugaratnam, said "We reaffirm the importance of the IMF as a quota-based institution. The implementation of the 2010 reforms remains our highest priority and we urge the United States to ratify these reforms at the earliest opportunity."

It added that "if the 2010 reforms are not ratified by year-end, we will call on the IMF to build on its existing work and stand ready with options for next steps".

IMF officials said the United States administration support the reforms, but they need to be ratified by Congress. Under the reform programme, the United States' quota would see its quota decline marginally.

Lagarde said the governance and quota reform were critical in the IMF's efforts to be more representative of its global membership.

On December 15, 2010, the board of governors, the IMF's highest decisionmaking body, approved a package of far-reaching reforms of the fund's quotas and governance.

Once implemented, it will result in a 100 per cent increase in total quotas and a major realignment of quota shares to better reflect the changing relative weights of the IMF's member countries.

Among other benefits, the doubling of quotas would shift more than six per cent of quota shares from over-represented to under-represented member countries.

mcpherse.thompson@gleanerjm.com