Washington: The International Monetary Fund has approved proposals that will lead to a major overhaul of the Fund's quotas and governance, and would put India among top 10 members.
The 10 largest members of the Fund will now consist of the US, Japan, the BRICs (Brazil, China, India, Russia), and the four largest European countries (France, Germany, Italy, the United Kingdom).
The Executive Board of IMF also endorsed a timeline that calls for the quota increase and realignments to take effect by the annual meetings of October 2012, and Executive Board reforms to be implemented no later than the subsequent Executive Board election, which is scheduled in late 2012.
"This historic agreement is the most fundamental governance overhaul in the Fund's 65-year history and the biggest ever shift of influence in favour of emerging market and developing countries to recognise their growing role in the global economy," IMF Managing Director Dominique Strauss-Kahn said after the Board's decision.
As a result of this, there will be a shift of more than six per cent of quota shares to dynamic emerging market and developing countries and more than six per cent from over-represented to under-represented countries, while protecting the quota shares and voting power of the poorest members.
"The doubling of quotas maintains the quota-based nature of the Fund, and ensures its ability to serve its membership in times of crisis.
A fairer allocation of quota shares reflecting better our members' economic importance, together with a more representative Executive Board, will enhance the credibility and effectiveness of the Fund s ongoing efforts towards greater global financial stability," Strauss-Kahn said.
"The reforms build on those initiated in 2008 and, combined with the earlier steps, the voting shares of emerging market and developing countries as a group will rise by well over 5 percentage points," he added.
"The package we have arrived at is a balanced one. The negotiations have not been easy, but our members have shown a willingness to compromise and to demonstrate the flexibility needed to reach an agreement for the greater common good," the IMF chief said.
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