Push for IMF reform

Delhi Law Academy Uncategorized

Finally, the International Monetary Fund has made country quota reforms agreed by the G20 in 2010 a reality. The chief objector to the changes, the U.S. Congress, dropped its intransigence in December and allowed the multilateral lender to adopt a country quota distribution that better reflects the power balance of emerging markets in the global economy.

With this structural shift, more than 6 percentage points of the quota, including both the Fund’s capital and its proportionate voting rights, have been transferred from developed to emerging economies.

The greatest gains from the reforms accrue to the IMF itself, as the combined capital that its 188 member-countries contribute will increase to approximately $659 billion from nearly $329 billion. Other winners are India and China, who have respectively increased their voting shares by 0.292 and 2.265 percentage points. The emerging economies wrested a 2.6 percentage points increase. Consequently, India, China, Brazil, and Russia will be among the 10 largest members alongside large advanced economies.