The International Monetary Fund (IMF) on 27 January 2016 implemented the long-pending 2010 Quota and Governance Reforms.
The reforms represent a major step towards the increasing role of dynamic emerging market and developing countries. The entry into force of these reforms will reinforce the credibility, effectiveness, and legitimacy of the IMF.
Highlights of the Reforms
• For the first time, four emerging market countries- Brazil, China, India, and Russia will be among the 10 largest members of the IMF.
• Other top 10 members include the United States, Japan, and the four largest European countries France, Germany, Italy, and the United Kingdom.
• India’s voting rights increased to 2.6 percent from the current 2.3 percent and China’s voting rights increased to six percent from 3.8.
• The reforms also increased the financial strength of the IMF by doubling its permanent capital resources to 659 billion US dollars.
• More than 6 percent of quota shares will shift to dynamic emerging market and developing countries and also from over-represented to under-represented IMF members.
• The quota shares and voting power of the IMF’s poorest member countries will be protected.
• For the first time, the IMF’s Board will consist entirely of elected Executive Directors, ending the category of appointed Executive Directors.
• The scope for appointing a second Alternate Executive Director in multi-country constituencies with seven or more members has been increased.
Reason for the delay in implementation of reforms
The 2010 Quota and Governance reforms were approved by the IMF’s Board of Governors in December 2010. However, their implementation got delayed due to the time taken by the US Congress to approve the changes.
The US Senate approved the changes in December 2015 paving the way for the implementation of the reforms.
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When: 27 January 2016