by David Lawder and Andrea Shalal
MARRAKECH, Morocco (Reuters) – Member countries of the International Monetary Fund (IMF) have failed to agree on a plan to increase funding for the institution due to disagreements over the language to be used in case of conflict, but committed to a “significant increase” in lending resources by the end of the year.
As the annual meetings of the IMF and the World Bank concluded in Marrakech, the presidency of the International Monetary and Financial Committee (IMFC), Spanish Economy Minister Nadia Calvino, called for “a significant increase in quotas which, at a minimum, maintains the current envelope of IMF resources” as $185 billion in bilateral borrowing agreements expire.
The quotas, paid by member countries in proportion to their participation, represent only about 40% of the IMF’s lending power, which amounts to around $1,000 billion.
The IMFC president said members failed to reach consensus on a joint statement due to disagreements over the language to use in conflict, although many member countries condemned the invasion of Ukraine by Russia and the killings of civilians in Israel and Gaza.
Member countries had to vote on the United States’ plan, which provides for countries to provide new quotas in proportion to their current participation – unchanged since 2010 – received the support of G7 countries, India and a number of other emerging markets.
However, China, whose economy is now three times larger than in 2010, continues to demand more shares from the IMF.
People’s Bank of China Governor Pan Gongsheng told the IMFC meeting that Beijing wants both an increase in quotas and a realignment of shares “to reflect the relative weight of members in the economy and strengthen the voice and representation of emerging markets and developing countries.
IMFC members agreed to add a third president to the IMF board to represent African countries, a key element in obtaining an “equi-proportional quota plan” from the IMF. from the United States.
The president of the CMFI left the door open to a possible adoption of the American plan, specifying that “transitional arrangements” could prove necessary. She also asked the IMF Executive Board to propose options for changing the shareholding formula by June 2025.
This would accelerate the next five-year quota review and respond to IMF Managing Director Kristalina Georgieva’s call for a deadline for shareholder adjustment to preserve credibility .
A US Treasury official told reporters that despite the lack of a firm agreement, notable progress had been made on the issue of quotas, with countries having discussed their positions and an agreement being “more and more probable” by October.
The World Bank’s governing body was also unable to issue a joint statement, although it noted in a statement from the Development Committee’s chairman, the United Arab Emirates, that “most members ” supported the G20 leaders’ language on the war in Ukraine.
The Development Committee formally endorsed the World Bank’s new vision of “creating a world without poverty on a livable planet”, with the aim of extending its mission to climate change, pandemics, fragile states and other global challenges.
(Reporting David Lawder, Andrea Shalal and Leika Kihara; French version Kate Entringer)
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