Expressing concerns over slow pace of quota and governance reforms of the International Monetary Fund (IMF), India has said that it is necessary to ensure legitimacy and effectiveness of the multilateral agency.
“...We are disappointed at the pace of the reform on (IMF) quota and governance issues. A dynamic process of reform is necessary to ensure the legitimacy and effectiveness of the Fund and the best possible means to improve governance and legitimacy is by ensuring that there is no slippage on crucial reforms,” Finance Minister Pranab Mukherjee said at the joint IMFC-G20 session.
Pointing out that the quota formula was of central importance since quotas are the main determinant of the voting power of members, he said efforts should be made to complete it by the target date of January 2013.
“For the emerging and developing countries, GDP is the most important variable in the quota formula and the weight of the blended GDP variable should be substantially increased in the formula. Our objective is a simple formula with GDP blend as either the sole or predominant variable and with a higher share of GDP—PPP,” he said.
The IMF reforms aim at increasing the voting power of developing countries.
Mr. Mukherjee also ratified the 2010 quota increase and said that the country would maintain “our relative share of the new arrangements to borrow.”