WASHINGTON, Jan 29: The IMF set a June deadline for making progress on reforms that would give emerging countries more say in how the world lender is run, an attempt to break a standoff created by U.S. failure to ratify the changes.
The governance reforms were adopted by the IMF in 2010, which initially set a 2012 deadline for all member countries to endorse them. The administration of U.S. President Barack Obama has so far been unable to persuade Republicans in Congress to act on the measure.
The board of the International Monetary Fund said Wednesday the institution’s 188 member countries should agree on steps that could make ‘meaningful progress’ toward the reforms by June 30, without providing details. Finance chiefs around the world had previously given the United States until Jan. 1 to act and threatened to move without it if it failed to do so.
The reforms would double the fund’s resources and give more say to emerging markets like China and Brazil. The changes would also revamp the IMF’s board to reduce the dominance of Western Europe.
Many U.S. Republican lawmakers complain the IMF reforms would cost too much at a time of high U.S. deficits and budget cuts, and would lessen U.S. influence at the IMF. Others see it as leverage to use in negotiations with the White House on other Republican priorities. There is no clear path toward passing even parts of the governance overhaul without formal approval from the United States, which holds the only controlling share of IMF votes. Past proposals to get around the U.S. Congress included proceeding with an ad hoc increase in the voting share of emerging economies, which would reduce the U.S. voting weight, and a more drastic proposal to refuse to extend the IMF’s emergency borrowing authority. U.S. foot-dragging has also delayed talks on the next round of reforms to further boost emerging markets’ IMF representation, which were supposed to conclude by January. The board pushed the deadline to mid-December. In the meantime, the IMF’s board recommended the Fund’s members should agree on a resolution ‘expressing deep regret’ about the delayed reforms.
‘The proposed resolution also emphasizes the importance and urgency of the 2010 reforms for the fund’s credibility, legitimacy, and effectiveness, and reiterates the commitment to their earliest possible implementation,’ the board said in a statement.
(agencies)
Follow our WhatsApp channel