P. S. Suryanarayana
Singapore, Sept. 15
The International Monetary Fund (IMF) Managing Director, Mr Rodrigo de Rato, said in Singapore on Friday that "there is a consensus that we need a new formula ... to measure to what extent countries are rightly represented or not at the Board."
Addressing the press, ahead of the IMF-World Bank Group annual meetings and a series of related events here in the coming days, Mr de Rato said: "In essence, we are asking our members (184 in all) to approve an increase in the quotas for the very under-represented countries in regard to their weight in the global economy, those ... being China, Mexico, and Turkey."
In addition to this near-term exercise, the IMF was now asking its members to "commit to work on a broader reform of the quota distribution process during [the] next two years."
In responding to a question later, he said this "second ad hoc increase" in about two years' time, as now proposed, would "probably" include "these four countries" - India, besides China, Mexico, and Turkey.
India, regarded in the IMF circles as being better represented than China at present, has a seat at the Fund's Board. So, Mr de Rato's implied reference to India, in response to a question that specifically included New Delhi, acquires political importance in this context.
On a parallel track of reform-plans, he indicated that the IMF was now seeking to go beyond its founding principle the "economic weight" of an individual member was "crucial in terms of legitimacy of voice in the institution."
In this domain of reforming the IMF's norms of internal governance, "there is [now] a very, almost universal, consensus that low-income countries' voice, independently of their economic weight, has to be preserved."
He maintained that the proposed reform relating to low-income countries "is a very important step in making the institution more responsive to what today the world-society requires in the governance of public institutions." However, "the question is not to make a list, right now," of such low-income countries that could be accorded a voice over the IMF's norms and working practices.
Mr. de Rato praised the "emerging economies" such as India and China among others for increasing their "resilience" in recent years and spelling "one of the best news in world economy."
Responding to a question, in this context, regarding the possibility of a revival of the idea of an Asian regional monetary Fund, Mr de Rato said: "Asia will become more involved in international economy, not less involved. In that respect, the role of the international institution such as the IMF can be extremely helpful."
Mr John Lipsky, the IMF's First Deputy Managing Director, who was also present at the press conference, said: "Greater integration ... is inevitable and potentially [a] very positive influence in the [Asian] region, but at the same time, is in no way counter to greater integration in the global economy."