Obama for increased India,China participation in IMF

Barack Obama said that the new role of the IMF after the G-20 Summit in London envisaged increased participation by major emerging economies of the world,in particular India and China.

Urging Congress to approve granting USD 100 billion loan to the International Monetary Fund,US President Barack Obama has said that the new role of the IMF after the G-20 Summit in London this month envisaged increased participation by major emerging economies of the world,in particular India and China.

8220;We proposed an expansion of the NAB New Arrangements to Borrow of up to USD 500 billion of which the US participation would be up to USD 100 billion and a further enlargement of its membership to include increased participation by the major emerging market countries,in particular China and India,8221; Obama wrote in four identical letters to the top Congressional leaders.

India,China and other major emerging economies are expected to get an increase in their quota share of the IMF now.

Obama8217;s letter to Congressional leaders comes as a follow up to the commitment made with other G-20 leaders at the meeting in London last month,wherein he proposed an expansion of the NAB fund from USD 50 billion to USD 550 billion.

Obama said the global economic crisis is seriously affecting emerging markets and developing countries,which are now experiencing severe economic declines and a massive withdrawal of capital.

The letters written to the Speaker of the House of Representatives,Nancy Pelosi; Senate Majority Leader Harry Reid; Senate Minority Leader Mitch McConnell and House Minority Leader John Boehner were released to the media Tuesday.

Observing that the deteriorating conditions threaten to worsen the recessions in these countries and could cause currencies to collapse,Obama wrote: 8220;Together,these factors,particularly if they become more acute,will further lower global growth and,as we saw during the Asian financial crisis,they will cause US growth,jobs,and exports to fall even more sharply.8221;

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The US President said a central element of the strategy decided at the G-20 Summit was the US proposal to increase the capacity of the IMF to lend to its members,primarily to developing and emerging countries facing economic and financial difficulties.

8220;We also pledged our support for several other aspects of our participation in the IMF that require congressional action: an IMF quota reform 8230;IMF gold sale8230;IMF8217;s income model and8230;an amendment to permit a special one-time allocation of Special Drawing Rights,reserve assets created by the IMF based on a basket of key currencies,that will increase global liquidity and will support the IMF in promoting global financial stability.

8220;These reforms should be considered alongside the proposed NAB expansion,8221; Obama wrote,urging Congress to take necessary legislative steps in this regard.

8220;Rapid progress is essential to the restoration of confidence in the global economy and financial system so that the global economy can emerge from recession to recovery and to sustained growth,8221; Obama said.