Deal for more quota struck at last moment

The deal to reform the International Monetary Fund (IMF) to give greater clout to developing nations.

The deal to reform the International Monetary Fund (IMF) to give greater clout to developing nations like India and halt aggravation of the ongoing currency war was struck at the last moment at the conference of G20 finance ministers and central bank governors here.

The uncertainty continued till the last minute and it was only in the wee hours yesterday that officials,after intensive overnight negotiations,managed to put together a communique that was acceptable to all 20 countries. Till this (Saturday) morning,the situation was really uncertain. It was clinched in the meeting of G7 and BRIC finance ministers, finance minister Pranab Mukherjee told reporters.

While the G7 represents the interest of industrial countries,the BRIC club comprises emerging economies like Brazil,Russia,India and China. The differences persisted mainly over ways to deal with the ongoing currency crisis. According to officials,nothing was achieved in the first session of the two-day conference that began on October 22,as differences between the developed and emerging nations continued.

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However,during the intervening sessions,BRIC finance ministers,who have emerged as an important pressure group advocating the cause of emerging economies,met and decided to extract the maximum that they could and conclude the deal. In between (the two sessions),the BRIC finance ministers met. Ultimately,when we resumed,it was decided we will have… (the deal), Mukherjee said.

Officials involved in the negotiations said that talks continued for the whole night and the draft was redone several times before the communique,reflecting the collective views of the G20 members,was given a final shape.

The communique spelled out a decision to give more voting power (quota share of 6 per cent) to emerging nations in the Washington-based lender,while asking nations to move towards more market-determined exchange rates and desist from competitive devaluation of currencies.

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