Washington: Emerging economies have expressed their deep disappointment over the inability of the US to ratify IMF quota and governance reforms that would give countries like India and China a larger say in the financial bodies' decision making process.
"We reiterate our deep disappointment with the lack of progress in implementing the IMF quota and governance reforms agreed to in 2010 and strongly urge the US to complete ratification," the G-24 countries said in a joint communique issued here on sidelines of the annual Spring meeting of the International Monetary Fund (IMF) and the World Bank.
This remains an impediment to IMF credibility, legitimacy, and effectiveness and has considerably delayed forward-looking commitments, namely, a new quota formula and the 15th General Review of Quotas, the G-24 said.
The IMF quota reforms seek to provide greater say to emerging economies like India at the Fund, where the US and large European countries command high influence. The ratification of the US is necessary for implementing the reforms, agreed by the member countries way back in 2010.
"We believe that a decision to de-link quota reform from the Board reform amendment, which is the element of the 2010 reforms that requires ratification by the US Congress, would be the preferred option in the interim, as it increases IMF resources and also realigns quotas to reflect the increased economic weight of EMDCs (emerging markets and developing countries)," it said.
The alternative option, interim ad hoc increases, can, if properly designed, achieve meaningful progress towards the shifts in representation under the 2010 reforms, although it would increase IMF quota resources only marginally, G-24 said.
It is important that any interim measures be designed so as not to lower incentives to complete the 14th General Review of Quotas, it insisted.
The G-24, which includes emerging and developing countries from Latin America, Africa, the Middle East and Asia, also called for the initiation of the work on the IMF 15th General Review of Quotas, including a new quota formula, without further delays so as to complete it by the December, 2015 deadline.
India, Pakistan, Sri Lanka, Brazil, South Africa and Egyt are also members of the G-24 group.
