IMF must continue to reform no matter who is at the helm

THE EXECUTIVE BOARD OF THE INTERNATIONAL MONETARY FUND announced on Tuesday that it has accepted the resignation of Managing Director and Chairwoman Christine Lagarde, who is to take over as head of the European Central Bank, and it has initiated the procedure of looking for a successor. China Radio International comments:

The IMF is at a critical moment in the reform of its members’ quotas and voting power. No matter who succeeds Lagarde, it is important the IMF continue to enhance the voice of emerging markets and developing countries, so that it can strengthen its legitimacy and effectiveness.

Given their fast growth and contribution to global growth — half of the world’s gross domestic product is generated by emerging and developing economies, and they also contribute 80 percent of global economic growth — they should have a greater quota and voting power in the organization so that it can better fulfill its duties.

The IMF is a major heritage of the Bretton Woods System that is committed to promoting global currency cooperation, providing funds and assistance, and maintaining international financial stability.

Since she became leader of the organization in 2011, Lagarde has made important efforts to push the envelope of badly needed reform. In 2016, the 2010 IMF quota and governance reform plan, which had been resisted by the United States since day one, was finally implemented, the emerging markets and developing countries combined gained a 6 percent quota increase and voting power, and two positions on the executive board, and all the executive directors are elected.

Still there is a long way to go, as the developed countries still dominate the IMF, and the US still has veto power on important decisions.

In the future, whoever is at the helm of the IMF, it will be seen that the rising proportion of emerging market countries and developing countries in the global economy is an irresistible trend, so it is necessary to continue to strengthen the voice of these countries in the IMF.