Business Economy News World

China urges IMF to give more power to emerging markets

(Reuters) – China called on IMF member nations on Wednesday to stick to a commitment to give emerging markets more power at the global lender after U.S. lawmakers set back historic reforms that would give developing countries a greater say.

International Monetary Fund Managing Director Christine Lagarde speaks at the National Press Club in Washington
International Monetary Fund (IMF) Managing Director Christine Lagarde speaks at the National Press Club in Washington in this January 15, 2014 picture provided by the IMF. REUTERS/Stephen Jaffe/IMF/Handout via Reuters

The remarks by Chinese Foreign Ministry spokesman Hong Lei were an indirect criticism of the United States, the biggest and most powerful IMF member, where lawmakers failed on Monday to agree on funding measures needed for the reforms to move forward, though Hong did not mention the United States by name.

The U.S. Congress must sign off on the IMF funding to complete 2010 reforms that would make China the IMF’s third-largest member and revamp the IMF board to reduce the dominance of Western Europe.

The changes would also give greater say to nations such as Brazil and India to reflect their growing economic heft.

“The IMF quotas reform is an important decision made by the organization,” Hong said at a daily news briefing.

“The relevant organization’s members should earnestly implement the decision, and honor and enhance the voice and representation of developing countries within the IMF.”

Speaking at the National Press Club in Washington, IMF Managing Director Christine Lagarde said it was “disconcerting” the IMF funding was not included in a spending bill approved by the U.S. Congress on Monday.

“I very much hope it’s a question of timing and not a decision to exclude the IMF,” Lagarde said.

“I hope that sensible and common sense judgment will prevail,” she said, adding that she believed the United States was still committed to supporting the Fund.

The reform of the voting shares, known as quotas, cannot proceed without the United States, which holds the only controlling share of IMF votes.

After putting off the request in 2012 because of the U.S. presidential election, the U.S. Treasury has sought to tuck the provision into several bills since March.

The administration’s requests, however, have been met with scepticism from some Republicans, who see them as tantamount to approving fresh funding in a tight budget environment.

Some lawmakers have also raised concerns about how well the IMF is helping struggling economies in Europe and the risks attached to IMF loans, suggesting Congress is in no hurry to approve any changes

India’s Finance Ministry did not immediately respond to requests for comment. But an official at the ministry, who has been dealing with multilateral institutions including the IMF, said India was “disappointed” at Congress’ lack of action.

The official declined to be identified because he was not authorized to talk to the media.

A South Korean Finance Ministry official, who declined to be identified, said: “While we appreciate the U.S. government’s efforts, we regret the fact that the proposed funding measure fell through in Congress at the last minute.”

“IMF quota reform is an important matter to address and we hope that the matter will be discussed at the G-20 level with the end-January deadline approaching,” the official said.

Developing nations have long viewed the IMF with suspicion for promoting disastrous privatizations that complicated the transition from communism for some emerging nations in the early 1990s, and for pushing budget cuts that exacerbated debt crises in Asia and Latin America a few years later.

That suspicion has been compounded by a power structure that dates to IMF’s founding in 1944. The structure was shaped by the victors of World War Two – the United States and Europe.

(Reporting by Sui-Lee Wee in Beijing, Frank Jack Daniel in New Delhi, Vincent Lee in Seoul and Anna Yukhananov in Washington; Editing by Nick Macfie and Meredith Mazzilli)

Print Friendly, PDF & Email
Article from:

We Recommend

The portal presents worldwide news, covering a large spectrum of content categories including Entertainment, Politics, Sports, Health, Education, Science and Technology and more. Top local and global news in the best possible journalistic quality. We connect users via a free webmail service and innovative.

China urges IMF to give more power to emerging markets

Discover more from Top Local & Global trusted News | Secure Email Account

Subscribe now to keep reading and get access to the full archive.

Continue reading