G-20 Deeply Disappointed U.S. Preventing IMF-Resources Boost
Baku, April 12 (AZERTAC). Global finance chiefs pressed the U.S. to allow an increase in the financial resources of the International Monetary Fund as they argued the Ukraine crisis underscores the lender’s importance.
“We are deeply disappointed with the continued delay in progressing the IMF quota and governance reforms,” Group of 20 finance ministers and central bankers said in a statement released after talks in Washington today. “We urge the U.S. to ratify these reforms at the earliest opportunity.”
The U.S. Congress is delaying implementation of the 2010 pact by all IMF member countries that would adjust some nations’ shares, or quotas, in the fund and boost its permanent lending capacity to about $739 billion. The plan would give emerging markets such as China more clout at the institution, which was set up at the end of World War II to help safeguard global monetary stability.
If the overhaul isn’t completed by year-end, the G-20 said it will call on the IMF to “build on its existing work and develop options for next steps,” according to the statement.
The Ukraine crisis, which pits G-20 member Russia against the U.S. and its European allies, highlights the importance of the IMF as the “world’s first responder to financial crises,” according to the statement.
The G-20 said prospects for global growth are strengthening although officials pledged to remain vigilant, according to the statement. It reiterated its members are committed to achieving exchange-rate flexibility.
“When the U.S. withdraws, everybody loses,” IMF Managing Director Christine Lagarde said in an interview with Bloomberg Television’s Tom Keene in Washington yesterday. “Do exercise that leadership; it’s there, it’s yours.”
The G-20’s call on the U.S. reflects increased frustration over a 3 1/2-year-old agreement that hasn’t yet come into force and is delaying another planned round of talks that would give developing economies more power. While criticism used to come mainly from emerging markets such as Brazil, it’s recently spread to developed counterparts including the U.K. and Australia.
“The IMF quota reform has been delayed for too long,” Chinese Vice Finance Minister Zhu Guangyao said in an interview in Washington today. Chinese central bank Deputy Governor Yi Gang yesterday warned that failure to deliver “is a threat to IMF’s legitimacy and creates uncertainty for future IMF resources.”
Russian Finance Minister Anton Siluanov today suggested emerging markets could seek to change the rules that govern the IMF’s emergency lending pool, which is temporary and needs approval from contributors to be activated.
In a statement to the IMF steering committee, U.S. Treasury Secretary Jacob J. Lew renewed the U.S. commitment to “fulfill our pivotal responsibility” in getting the measure approved.
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