Failure to act on IMF reform damages G20 leadership

WASHINGTON -- Failure to act on the much-delayed International Monetary Fund (IMF) quota and governance reform will seriously damage the leadership of G20, a senior Chinese official warned Thursday.

"I think that 2010 quota and governance reform is good for everyone. We've been working on that for several years, and it's already reached consensus," Yi Gang, deputy governor of the People's Bank of China, said at a seminar held here at the sidelines of the IMF-World Bank Spring meeting.

"Failure to deliver the 2010 IMF reform is a serious damage to the G20 leadership," Yi said, noting that the reform package was in every G20 communique released after the G20 Seoul Summit in November, 2010.

"It's a threat to the IMF legitimacy, and ...create some uncertainty for the future resources of IMF," Yi warned, urging "the relevant country to pass this reform as soon as possible".

Most of the IMF's 188 member nations have approved the reform package, while opposition from the House and Senate Republicans have blocked the United States, which has the largest voting share on the IMF board and the unilateral veto power over IMF decisions, to ratify the deal.

The IMF's Board of Governors approved the quota and governance reform package in December 2010. The plan included a doubling of IMF 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 24-member board.

If the reform package is implemented, four large emerging economies, namely China, India, Russia and Brazil, will all become top 10 shareholders of the Washington-based global lender.

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