G20 regrets delay in IMF reforms; India says cant wait for long
Feb 23 2014 , Sydney
"We deeply regret that the IMF quota and governance reforms agreed to in 2010 have not yet become effective and that the 15th General Review of Quotas was not completed by January 2014.
"Our highest priority remains ratifying the 2010 reforms, and we urge the US to do so before our next meeting in April," said the communique released after the two-day G20 Ministerial meeting.
In an interview to Australian Financial Review (AFR) newspaper, Rajan said: "There is only so long the world can wait for the US to get its act together (on IMF reforms)".
The IMF quota reforms, which seek to increase the voting share of emerging economies including India, had hit a roadblock with the US Congress failing to agree on a new funding mechanism for the multilateral body.
The emerging counties, like India, China, Brazil and Russia, has been asking for increased voting rights in IMF, which would reflect their growing share in world economy.
International Monetary Fund (IMF) Chief Christine Lagarde said she would "look forward" to continuing discussions on the matter at the next meeting of the International Monetary and Financial Committee (IMFC) scheduled for April in Washington.
Finance Minister P Chidambaram told PTI: "We want the 14th round of quota reforms that began in 2010 to be completed quickly by April 2014 and discussions starting on the 15th round".
The quota reform once implemented will increase India's voting share from the current 2.44 per cent to 2.75 per cent, following which the country will become the eighth largest quota holder at the IMF, up from the 11th position.
Taking note of the G20 regret over the lack of progress in making effective the 2010 Quota and Governance Reform, Lagarde said "At the IMF, we share this view and urge rapid progress on implementation".
The RBI Governor called upon emerging markets to step up in the fight to reform the IMF.
"We emerging markets also have to step up and be part of the agenda setting, rather than passive when the agenda is set and then (be) reacting to the agenda," AFR quoted him saying.
Rajan, who was here to participate in G20 meeting, further said problems were not confined to quotas alone.
"It's also [about] even-handedness in policy assessment; cajoling all sides to work for better outcomes," he said.
"There really is still no regional organisation to do the frank truth-telling which the IMF does. But increasingly there would be concern if these reforms don't take place; that the truth-telling is not going to be as unbiased as everyone would like," he added.