Who’s done their IMF homework–and who hasn’t
In November 2010, the executive board of the International Monetary Fund agreed to a much-ballyhooed package of reforms designed to make the Fund both more equitable and more capable of responding to global crises. Then managing director Dominique Strauss-Kahn described the agreement as a critical step toward recognizing new ecoonomic realities: It means we now ...
In November 2010, the executive board of the International Monetary Fund agreed to a much-ballyhooed package of reforms designed to make the Fund both more equitable and more capable of responding to global crises. Then managing director Dominique Strauss-Kahn described the agreement as a critical step toward recognizing new ecoonomic realities:
In November 2010, the executive board of the International Monetary Fund agreed to a much-ballyhooed package of reforms designed to make the Fund both more equitable and more capable of responding to global crises. Then managing director Dominique Strauss-Kahn described the agreement as a critical step toward recognizing new ecoonomic realities:
It means we now have the top 10 shareholders that really represent the top 10 countries in the world, namely the United States, Japan, the four main European countries, and the four BRICs. The ranking of the countries is now really the ranking they have in the global economy.
At the time, the IMF chief also lauded the agreement to double the "quotas" that countries pay into the Fund, boosting the institution’s lending power substantially and reducing the need for ad hoc funding lines.
That was almost 18 months ago. The measures are still not in place, however, because the required combination of states have not taken the domestic steps necessary to make them effective. In its understated way, the staff of the IMF appears concerned. The latest report on implementation noted that time is running out for members to meet their self-imposed deadline of late 2012:
[T]he membership remains about half way toward meeting the thresholds for acceptance of the Seventh Amendment…With only seven months remaining on the timeline suggested by the Board of Governors, a substantial effort is needed to make the 2010 Governance and Quota Reforms effective no later than the 2012 IMF/World Bank Annual Meetings.
Because voting at the Fund is weighted by economic power, the approval of the most powerful economies is most important. According to the IMF report, those G20 members that have done at least some of their homework on the agreed reforms are Australia, Brazil, China, France, India, Italy, Japan, Korea, Russia, Saudi Arabia, South Africa, and the United Kingdom. Those G20 members that still have to enact both reforms are Argentina, Canada, Germany, Indonesia, Mexico, Turkey, and the United States.
The United States, with by far the largest voting share, is the critical missing piece. Facing some Congressional hostility, the Obama administration has balked at requesting the needed funds for the quota increase. Add IMF reform to the very long list of things that Congress will have to grapple with once the election is over.
David Bosco is a professor at Indiana University’s Hamilton Lugar School of Global and International Studies. He is the author of The Poseidon Project: The Struggle to Govern the World’s Oceans. Twitter: @multilateralist
More from Foreign Policy
Saudi-Iranian Détente Is a Wake-Up Call for America
The peace plan is a big deal—and it’s no accident that China brokered it.
The U.S.-Israel Relationship No Longer Makes Sense
If Israel and its supporters want the country to continue receiving U.S. largesse, they will need to come up with a new narrative.
Putin Is Trapped in the Sunk-Cost Fallacy of War
Moscow is grasping for meaning in a meaningless invasion.
How China’s Saudi-Iran Deal Can Serve U.S. Interests
And why there’s less to Beijing’s diplomatic breakthrough than meets the eye.
Sign up for Morning Brief
Foreign Policy’s flagship daily newsletter with what’s coming up around the world today. Delivered weekdays.
By submitting your email, you agree to the Privacy Policy and Terms of Use and to receive email correspondence from us. You may opt out at any time.
