The International Monetary Fund (IMF) on Friday urged member countries to speed up the approval process of the agreed governance and quota reforms to enhance the agency's lending capacity and effectiveness.
On March 12, the executive board of the IMF reviewed progress toward implementation of the 2010 Governance and Quota Reform Package. The executive directors were informed that the necessary legal thresholds required for effectiveness of the reforms have not yet been reached, the Washington-based global lender said in a statement released on Friday.
"As of March 12, 2012, 89 members having 53.14 percent of Fund quotas had consented to their proposed quota increases under the 14th General Review of Quotas. As of the same date, 66 members having 45.36 percent of the total voting power had accepted the proposed amendment to reform the Fund's 24-member Executive Board, " noted the statement.
"I urge remaining countries to complete the necessary legislative steps and other legal measures quickly to implement this important agreement within the agreed timeframe," IMF Managing Director Christine Lagarde said in the statement.
The IMF Board of Governors approved a quota and governance reform package on December 15, 2010 against the backdrop of severe economic recession in many advanced countries. The package included a doubling of IMF quotas under the 14th General Review of Quotas and a shift in quotas to dynamic emerging markets and under- represented countries, and a proposed amendment to reform the executive board that would facilitate a move to a more representative and all-elected executive board.
For the quota increases under the 14th General Review of Quotas to become effective, two conditions need to be met. First, the entry into force of the proposed amendment to reform the executive board, which requires acceptance by three-fifths of members having 85 percent of the Fund's total voting power; second, the consent to the quota increase under the 14th General Review of Quotas by members having not less than 70 percent of total quotas as of November 5, 2010.
The IMF was endeavoring to make the 2010 reform package effective before the 2012 Annual Meetings scheduled for this October, but the legislatures of some important IMF members including the United States have not given the green light to the reform package.