India seeks quick ratification of quota reforms
Washington: Indian Finance Minister Pranab Mukherjee has urged lagging International Monetary Fund (IMF) members to move quickly to ratify quota and governance reforms that would give developing nations a greater voice in running the 188-nation global lender.
The reforms, that were agreed to in 2010, are still pending because only 53.7 percent of the members had ratified them as against 70 percent required for the voting quota and 85 percent for changes in the board of governors, he told reporters here Sunday.
Mukherjee, who was here to attend the spring meetings of International Monetary Fund (IMF) and the World Bank said when quota reform at the IMF were recently reviewed, "it was found that the decision has not yet been approved by a number of countries."
"So we ask that those countries who have not yet ratified the decision should do so," he said referring to discussions over the last few days in Washington about the next round of quota reforms, which are due to be completed by 2014.
But Mukherjee said the decision by the BRICS nations - Brazil, Russia, India, China and South Africa - to delay the announcement of how much they would contribute to the IMF's $430 billion anti-crisis firewall fund was not connected to the lack of progress on the quota reforms.
The delay was due to practical considerations, he said noting that the new Russian government was yet to be constituted and in India's case, it needed formal cabinet approval although he had obtained Prime Minister Manmohan Singh's okay on the phone.
The BRICS nations want the 2010 reforms to be completed this year as planned, and they also want a new round of reforms in which the size of a country's gross domestic product is a determining factor in its vote share in the IMF.
Explaining some of his criticism of the IMF policy recommendations on capital flows, Mukherjee said the G-24, which concerts the position of developing countries on monetary and development finance issues, had expressed "strong reservations" with the IMF staff recommendations on this matter.
"There cannot be a strait jacket formula or one-size-fits-all formula. The countries should have the flexibility to determine how they can watch the volatility of capital flows and how they can handle it. It should be country-specific," Mukherjee said.