ZCZC
BCN-12
IMF-ECONOMY-LOANS-VOTES
IMF members put off voting change; agree to boost lending capacity
WASHINGTON, Oct 19, 2019 (BSS/AFP) – Global finance ministers agreed Friday
to double a key pool of money that the International Monetary Fund can use to
aid distressed countries but again put off giving more votes to major
emerging economies.
The IMF has been working to restructure its voting shares to give more
weight to growing economies like China, India and Brazil but some traditional
powers have resisted since they stand to lose influence in the institution.
Despite a prior commitment to complete the new voting distribution before
now, IMF membership at this week’s annual meetings kicked the can down the
road, committing instead to revisit the issue at the latest by December 2023,
according to a statement on Friday.
However, a new division of voting power “would be expected to result in
increases in the quota shares of dynamic economies in line with their
relative positions in the world economy,” the statement said.
The Washington-based lender, founded in the wake of World War II, has
traditionally been controlled by the United States and western European
countries.
But major developing economies, which account for a growing share of global
GDP, warn that without a shift of the power structure the IMF risks losing
legitimacy and the ability to influence economic policies.
But the IMF’s governing body did agree to a plan to shore up the crisis
lender’s resources, doubling to $500 billion a temporary fund provided by 40
of the fund’s 189 members, the statement said.
The IMF gets most of its resources through member quotas but since the
review was pushed back it will rely on the special fund, known as the New
Arrangements to Borrow, to ensure it has sufficient resources to ward off a
new crisis.
The NAB was rolled back following the global financial crisis and the
current iteration was approved for five years through November 2022.
“I welcome this high-level endorsement, which demonstrates the strong
support of our membership for the fund’s mission,” IMF Managing Director
Kristalina Georgieva said.
BSS/AFP/HR/1105