Disappointed on Quota and Governance reforms not being effective: FM
The Finance Minister, Arun Jaitley, in his address to the International Monetary and Financial Committee on April 19, 2015 asked the International Monetary Fund (IMF) to safeguard the global economic and financial stability in the period ahead.
Expressing his resentment, Jaitley said, “We are greatly disappointed that the 2010 Quota and Governance Reforms have not become effective in spite of strong support of the global community for the reform. We are also concerned that we have not made any headway in the forward looking elements of the 15th Review, including the review of the quota formula and the initiation of the discussions on the Review.”
Governance reforms are required to ensure the Fund’s credibility, legitimacy and effectiveness. They are also most imperative to maintain its relevance. They, therefore, should not be deferred indefinitely, the Union Minister said and added that we urge the members who have not yet ratified the 2010 Quota and Governance Reforms to do so at the earliest.
In the interregnum, as indicated in the Board of Governors’ Resolution of February 2015, the Executive Board should work expeditiously to complete its work to make meaningful progress in the key areas covered by the 2010 Quota and Governance Reforms pending their full implementation. Among the options being considered, the Finance Minister said, "We believe that the delinking option remains the most desirable option since it is the nearest in form and substance to the 2010 reform package."
The ad hoc option would reduce the incentive to implement the 2010 reforms in full. Further, it is important to begin work in earnest on the 15th Review so that it can be completed by December 15, 2015 as mandated under the Articles of Agreement. The continuance of such momentum in the IMF governance and quota reforms is essential to maintain the effectiveness, credibility and relevance of the IMF as a multilateral quota based institution, which reflects adequately changes in the global economy in a dynamic framework, he said.
This article was published on April 20, 2015 – 9:40 pm IST.
to success.