US Congress should approve IMF voice reform swiftly: expertsSouce:Xinhua Publish By Loretta S. Mcintyre Updated 31/12/2013 8:46 pm in Business / no comments
The US Congress should approve the long-delayed 2010 voice reform of the International Monetary Fund (IMF) in a timely manner against the backdrop of an increasingly interdependent global economy, two experts said on Monday.
In the next few weeks, Congress can approve at little budgetary cost to US taxpayers an increase in resources at the IMF that will help protect Americans from the costs of the next global financial crisis, said Nancy Birdsall, founding president of the think tank Center for Global Development and Clay Lowery, former U. S. Assistant Treasury Secretary.
The IMF’s Board of Governors approved a quota and governance reform package on December 15, 2010. The package included a doubling of IMF quotas and a shift in quotas to dynamic emerging markets and under-represented countries, and a proposed amendment to reform the executive board that would facilitate a move to a more representative and all-elected executive board.
The IMF previously intended to make the 2010 reform package effective before October 2012, but Congress of the United States, the IMF’s largest shareholder, has become the major stumbling block for the reform.
“The US negotiators secured two key results in the 2010 negotiation that should make it easy for Congress to say yes. First, the United States need not contribute new money; it will simply transfer money Congress already appropriated five years ago from a special IMF-housed fund into the formal, permanent reserves at the IMF. Second, the United States will maintain its voting power within the IMF at the same level,” they said in an article posted on The Hill, a congressional newspaper.
Under the international agreement, once the US Congress acts, the US quota in the IMF will increase by approximately 63 billion dollars, and the US commitment to the New Arrangements to Borrow (NAB), a pool of fund supplementing the IMF’s quotas in case of crisis, will decrease by an equal amount.
“An increase in IMF resources makes eminent sense in a global economy that is bigger and more interdependent than ever, and in which the IMF is the closest institution we have to a global lender of last resort. You can think of the IMF a global financial fire department: as the global economy has grown, the IMF needs more resources to prevent local brushfires from spreading out of control,” they argued.
“The United States benefits greatly from global financial stability. Bolstering the IMF’s capacity to assist hard-hit countries supports US exports and jobs as well as confidence in financial markets generally,” they contended.
“Since the IMF was created in the final years of World War II, every US president, Republican and Democrat, has supported strong US engagement with the institution. Presidents Ronald Reagan, George H.W. Bush, and Bill Clinton all backed legislation that increased resources to the IMF, and President George W. Bush championed legislation supporting reforms,” they added.