Expressing “extreme disappointment” with delay in completion of IMF quota reforms, India today stressed that the Fund should strictly abide by the new deadlines set for the 15th General Review of Quota (GRQ).
Finance Minister Arun Jaitley also said that since the forces of globalisation and multilateralism can go a long way in expanding global growth opportunities, “we must focus on the coordinated policy actions and growth strategies”.
“Let me say we are somewhat disappointed that the deadline for completing the 15th Review will be pushed back to the 2019 Spring Meetings,” he said at the International Monetary and Finance Committee (IMFC) plenary session.
While expressing India’s extreme disappointment, the finance minister emphasized that the Fund should strictly meet the new deadlines, a release said.
Jaitley felt that there is a “dire need” for increasing quotas since there is a broad agreement on maintaining the current overall lending capacity of the Fund and its resource pool is excessively tilted towards borrowed resources.
Recent work by the Fund also points to the need for realigning quota shares to reflect the changed economic realities, he said further.
“All this can be achieved as part of the 15th Review. Delays in General Reviews of Quotas erode the Fund’s legitimacy and credibility, and are against the provisions of the Articles of Agreement,” Jaitley said.
“I do hope that the deadlines that will now be set for completing the 15th Review, including agreement on a new quota formula as the basis for realignment of quota shares, will be honoured and adhered to in letter and spirit.”
According to the finance minister, it is also important that the new quota formula should give more weight to PPP GDP to better reflect the true economic strength of emerging market and developing economies (EMDEs).
IMFC is a key body providing strategic direction to the work and policies of the International Monetary Fund (IMF). The events were attended by select finance ministers and central bank governors.
Comprehensive review of the current quota formula was completed in January 2013, when the Executive Board submitted its report to the Board of Governors.
The outcome of this review will form a basis for the Executive Board to reach a broad consensus on a new quota formula as part of the 15th Review. Work towards the completion of the 15th Review are in progress.