06
Oct
India, along with other BRICS-member countries, will “aggressively pitch” for expediting reforms at the International Monetary Fund and World Bank Group at the forthcoming annual meetings of these global bodies.
This is to ensure that these international financial institutions provide greater voice and representation to developing countries and address their developmental needs.
“During the annual meetings (to be held in Washington DC from October 10-12), India will highlight the need for IMF quota reform and the World Bank Group voice reform,” a senior finance ministry official told FE.
On October 2, IMF managing director Christine Lagarde said: “To be effective in the 21st century, we (IMF) need to be adequately resourced and adequately reflect the dynamic nature of our global membership.”
“To that end, the vast majority of our members have approved an IMF governance measure: the 2010 Quota reform. We now await approval by our largest shareholder — the United States — which we hope will happen soon,” she said.
The US has been accused of holding up the implementation of the 2010 quota reform agreed upon by IMF member countries for ‘a major realignment in the ranking of quota shares under the reform package so that the Fund better reflects global realities’.
The US was to adjust its share and increase its contribution to IMF, but the US Congress is yet to give its approval for the move. The Congress approval would have paved the way for the emerging economies, including India, getting a higher share.
Currently, the US has 16.75% out of total votes and 17.69% of the total quota in IMF. Since important IMF decisions need 85% approval, this cannot happen without a US nod.
As per IMF norms, each member country is assigned a quota based on its relative position in the world economy. Quota subscriptions are the primary sources of the IMF’s financial resources, the IMF said, adding that a member’s quota determines its maximum financial commitment to the IMF and its voting power, and has a bearing on its access to IMF financing.
A significant development that is likely to happen on the sidelines of the IMF and World bank Group annual meetings is the meeting of the BRICS member countries (Brazil, Russia, India, China and South Africa) to take forward their decision to operationalise the New Development Bank (or BRICS Development Bank). India and China are awaiting the parliaments of South Africa, Brazil and Russia to ratify such a move, the sources said.
The sidelines of the annual meetings will also witness the last preparatory meeting of the G20 member countries before their Brisbane Summit in November. The agenda includes taking forward the WTO talks, sharing of information on tax evasion and black money, women empowerment, labour reforms and other steps to improve the global GDP.
Source: http://www.financialexpress.com/news/india-brics-to-seek-faster-reforms-at-international-monetary-fund-world-bank-meets/1295750/0