Quota reform is one of the key issues that Finance Minister Pranab Mukherjee
“Quota reforms in IMF is one of our basic object… we want at least 5 to 6 per cent quota should be increased in IMF and emerging market economies of the world should have their shares,” Mukherjee said in New York on Wednesday.
“This is one of the subjects that will emerge in the course of my discussions with the authorities of the World Bank and IMF,” he added.
The Brussels Declaration on more effective global economic governance, adopted at the conclusion of the eighth ASEM summit, stated that IMF quota shares should be shifted to dynamic emerging markets and developing countries by at least five per cent from over-represented to under-represented countries.
Like the United Nations’ Security Council, which is criticised for reflecting the political power structure that existed after the Second World War, the International Monetary Fund is rebuked for reflecting the economic dynamics of the same era.
He pointed out that the emerging developing countries were making a substantial contribution in the world’s output and GDP, Mukherjee said, “according to us the quota and governance structures of IMF does not reflect the ground realities.”
Underling the urgent need for reform, Mukherjee said that global economic realities “should get reflected in the share in the quota and governance architecture of the world’s financial institutions.”
Meanwhile, a German official told the media in Berlin on Tuesday that Germany was give up as many as two seats on the IMF board to modernise the institution if other ready countries, including the US would do so, Dow Jones reported.
“We Europeans are interested in a package solution. We are willing to give up quota shares, but the same must be true for other, over-represented countries,” the official said, speaking on the condition of anonymity because the negotiations have yet to begin in Washington.
Dow Jones further reported that last week European Union finance ministers approved a proposal where out of the 24 board seats it would share with emerging nations two of its eight executive director seats on a rotating basis among the smaller European countries.
Mukherjee also plans to raise this issue again at the meeting of finance ministers from the G20 countries in South Korea, later this week.