The emerging economies gained more influence in the governance architecture of the International Monetary Fund (IMF).
- The reforms, were agreed upon by the 188 members of the IMF in 2010, in the aftermath of the global financial meltdown.
- More than six per cent of the quota shares will shift to emerging and developing countries from the U.S. and European countries.
Which countries gained?
- India’s voting rights increase to 2.6 per cent from the current 2.3 per cent, and China’s to six per cent from 3.8. Russia and Brazil are the other two countries that gain from the reforms.
Why delay in the reforms?
- Among the reasons for the delay has been the time it took the U.S Congress to approve the changes. U.S voting share will marginally drop, from 16.7 per cent to 16.5 per cent.
- Though the country holds a veto power, Republicans have been agitated over “declining U.S power.”
- For the first time, the Executive Board will consist entirely of elected executive directors, ending the category of appointed executive directors. Currently, the members with the five largest quotas appoint an executive director, a position that will cease to exist.
- The significant resource enhancement will fortify the IMF’s ability to respond to crises more effectively.
- These reforms will reinforce the credibility, effectiveness, and legitimacy of the IMF.