G20 regrets IMF reforms delay, India says can’t wait for long
NEW WORLD ORDER US urged to ratify reforms by April; RBI governor says there is only so long the world can wait
SYDNEY: The group of 20 richest countries of the world, known as G20, said on Sunday that it “deeply regrets” the delay in IMF quota reforms, and asked the US to make it effective before April, as India’s central bank governor Raghuram Rajan said emerging economies cannot wait for long for the reform.
“We deeply regret that the IMF quota and governance reforms agreed to in 2010 have not yet become effective... we urge the US to (ratify the 2010 reforms) before our next meeting in April,” said the communique released after the two-day G20 ministerial meet.
In an interview to Australian Financial Review (AFR) newspaper, governor Rajan said: “There is only so long the world can wait for the US to get its act together.”
The IMF quota reforms seek to increase the voting share of emerging economies such as India. The move hit a roadblock with the US Congress failing to agree on a new funding mechanism for the multilateral body.
Emerging countries have been asking for increased voting rights in IMF to reflect their growing share in the world economy. For instance, the quota reform, once implemented, will increase India’s voting share from the current 2.44% to 2.75%, and will make it the eighth largest quota holder at the IMF, up from the present 11th position.
Rajan said problems were not confined to quotas alone.
“It’s also (about) even-handedness in policy assessment; cajoling all sides to work for better outcomes,” he said. Share of CEOs polled who expect the interim budget to help increase overall demand within 6 months
Share of CEOs who believe that budget announcements would not lead to any change Expect no increase in credit demand, indicating that new investment activities have not yet started picking up
Foresee investment revival from the third quarter of 2014-15. The formation of the new govt seems to be key to making new investment decisions rising interest costs
moderating GDP political uncertainty inflation others Source: Confederation of Indian Industry; HT Graphic