India demands greater voice in IMF for emerging economies
Saturday, April 25, 2009 (22:19:12) Tags: India, Business, Economy
Washington: As the world grapples with the deepest recession since World War II, India has sought greater voice and representation for emerging and developing economies in a key international institution charged with leading the recovery efforts.
Noting that the whole world had a stake in the role of the International Monetary Fund (IMF) in orchestrating the road to recovery, Reserve Bank of India Governor Duvvuri Subbarao today noted the principle of substantially greater voice and representation for them was reiterated in the Washington Declaration of the G20 Leaders and endorsed by the London Summit.
"We now expect that the quota review will result in a comprehensive reform of the governance of the Fund," he told the International Monetary and Financial Committee as the Fund and World Bank begin their twice-yearly meetings here.
The initiative towards internal governance reform within the Fund should follow the quota and voice reform, Subbarao said calling for the introduction of an open, merit-based process, irrespective of nationality and geographical preferences, for the selection of the senior management of the Fund.
The next managing director of the IMF should be selected in this manner, he said noting that "what started off as a sub-prime crisis in the US housing mortgage sector has turned successively into a global banking crisis, global financial crisis and now a global economic crisis".
Describing IMF's surveillance role - monitoring global, regional and national economies to assess whether countries' policies are consistent not only with their own interest but also with the interest of the international community - as the core to its very existence, Subbarao stressed the need for greater focus on systemically important countries.
"In parallel, the gap between multilateral and bilateral surveillance should be bridged. The IMF's surveillance should not add to the obligations of developing countries," he said.
As the Fund is a quota-based organization and quotas have to be the primary mechanism through which the resource needs of the Fund are ultimately met, Subbarao sought earliest ratification of the April 2008 package of quota and voice reform.
He also wanted the completion of the 14th General Review of Quotas to be advanced from January 2013 to January 2011 with the aim of at the minimum doubling the quota resources.
A time-sliced work plan should be laid down, commencing at the earliest so that the quota review can be completed in the targeted year and a half time frame. Since the process of increasing and allocating quotas could take some time, India supported the Fund's efforts on securing alternative resources, including borrowing, "but these should be seen as bridging mechanisms until the quota review is complete".
India is prepared to take on its share of responsibility to augment the Fund's resources, he said. "We would be able to commit on the extent of participation once the modalities are evolved in keeping" with certain key principles, consistent with the London Summit decisions. Over a million to appear in engineering entrance test. (IANS)