By David Lawder
WASHINGTON (Reuters) – The United States faces an uphill battle to persuade other International Monetary Fund (IMF) member countries to expand IMF lending without increasing the shares of China, India and Brazil, they say. government officials and development experts.
As top global finance officials prepare to gather in Marrakesh, Morocco, next week for the annual meeting of the IMF and World Bank, where reform of IMF quota resources is expected to be a contentious issue, some They already anticipate a delay in decision-making.
“Increasing quotas without realignment would politically weaken the Fund,” a Brazilian official told Reuters, adding that Brazil, China and India deserved a larger role in the IMF commensurate with their growing importance in the global economy.
Quotas contributed by member countries in proportion to their voting power now represent more than 40% of the Fund’s trillion-dollar loans, which have been burdened by years of COVID-19, inflation, climate crises and the repercussions of war. of Russia in Ukraine.
Increasing contributions would allow developing countries to access larger loans and give them more security than current arrangements. The IMF maintains that increased resources are “vital” to safeguard the global economy against future shocks.
Monetary contributions have not increased since 2010, a move that gave more voice to China, Brazil and other fast-growing emerging market economies at the expense of European countries.
If this exercise were repeated, China would probably experience the largest increase, since although it only controls 6.08% of the IMF’s voting power, and represents 18% of the world’s gross domestic product, according to IMF estimates. On the other hand, the United States is the largest shareholder in the IMF, with 16.5% of the voting power.
But with rejection of China firmly entrenched in the US Congress, any move to increase the Asian country’s quota would provoke a political backlash against US President Joe Biden, who is seeking re-election next year.
The plan that U.S. Treasury Secretary Janet Yellen is pushing at the Morocco meetings would require countries to contribute new money in proportion to their current quotas, with changes to the formula to be introduced later.
A Brazilian official, speaking on condition of anonymity because discussions over IMF quotas are private, said negotiations in Marrakesh would be “intense” but that the U.S. proposal was not the only solution.
(Reporting by David Lawder; Additional reporting by Andrea Shalal in Washington and Marcela Ayres in Brasilia; Editing in Spanish by Sofía Díaz Pineda)
2023-10-07 00:51:56
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