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U.S. Congress ratifies IMF quota reforms

Xinhua, December 19, 2015 Adjust font size:

U.S. Congress on Friday approved the long-delayed reforms to increase representation of emerging market economies in the International Monetary Fund (IMF).

The U.S. Senate and the House of Representatives on Friday passed a government spending and tax breaks package, in which the lawmakers ratified the five-year-old international deal to give emerging markets more saying in the international lender.

Christine Lagarde, managing director of the IMF, on Friday welcomed the adoption of legislation by the U.S. Congress to authorize the IMF's 2010 quota and governance reforms.

"The United States Congress approval of these reforms is a welcome and crucial step forward that will strengthen the IMF in its role of supporting global financial stability," said Lagarde in a statement on Friday.

The 2010 quota and governance reforms were approved by the IMF board in 2010. The reforms will double the IMF quotas and reallocated quota and voting shares in IMF away from advanced economies, primarily in Europe, to growing emerging market economies.

China will have the third largest IMF quota and voting share after the United States and Japan, and India, Brazil and Russia would be also among the top ten members of the IMF.

The reforms are the biggest change in the governance of the IMF since it was established and are a recognition of the increasing role that emerging markets play in the global economy. Despite repeated calls from the IMF and the international community, many U.S. lawmakers resisted the reforms and delayed the ratification of the reforms for years.

"The delay has cost the United States dearly in terms of its credibility and global leadership," Ted Truman, a former Treasury official and now senior fellow at the Peterson Institute for International Economics, wrote in a blog post Wednesday.

"The reforms significantly increase the IMF's core resources, enabling us to respond to crises more effectively, and also improve the IMF's governance by better reflecting the increasing role of dynamic emerging and developing countries in the global economy," said Lagarde. Enditem