Washington/New Delhi, April 22: Calling for a timely review of the International Monetary Fund (IMF)’s quota system, India has urged for the creation of a robust quota-based permanent resource base for the multilateral lender to mitigate risks to the international monetary system. The call was made by Union Finance Minister Arun Jaitley in his speech at the International Monetary and Financial Committee that was delivered in his absence on Saturday by Reserve Bank of India (RBI) Governor Urjit Patel. Patel is leading the Indian delegation to the Spring Meetings of the World Bank and the IMF which bring together finance ministers and central bankers of member countries. “A strong quota-based permanent resource base for the IMF would serve to strengthen the Global Financial Safety Net (GFSN) and mitigate risks to the international monetary system,” Jaitley said, as per the speech released by the Finance Ministry.
“We strongly support the shared multilateral commitment on completing the 15th General Review of Quotas (GRQ) by the 2019 Spring Meetings and no later than the 2019 Annual Meetings as we call for the realignment of quota shares of EMDEs (emerging market and developing economies) whose under-representation has increased further by 0.5 percentage points in the last update leading to under-representation of EMDEs by 7.5 per cent,” he said.
Jaitley said although the quota increases under the 14th GRQ, the renewal of New Arrangements to Borrow (NAB) and bilateral commitments have helped in maintaining the current lending capacity, the IMF would continue to require sufficient resources “to respond to actual, potential or prospective financing needs going forward”. “We call upon the IMF to develop credible policy advice for rebalancing of the global economy while drawing attention to the adverse implications of policy spillovers on other countries,” Jaitley said. “The intensifying challenges to multilateralism call for unequivocal and forceful voice of the IMF and the WTO (World Trade Organisation) in favour of rule-based international trading system and against protectionism,” he added. (IANS)