By Arun Kumar, IANS,
Washington : India has demanded a greater say for emerging markets in the global economic governance structure reflecting their changing importance and their role in recovery from one of the worst global financial crisis in decades.
Expansion of the International Monetary Fund’s role “is inextricably linked to reform of Quota’s,” Finance Minister Pranab Mukherjee said during the IMF-World Bank annual meetings here Saturday noting, “It cannot be effective or credible without a shift in governance structure and voting power.”
“Unless relative power in the board of directors and the board of governors reflects the changing global economic reality, the legitimacy of the IMF will again be questioned,” he said addressing the steering committee of the 187 nation global financial institutions.
Noting that “in the current situation of depressed global demand, countries like India who are injecting net demand into the global economy are contributing to the global recovery,” Mukherjee also called for correcting global Imbalances.
“The most divisive issue is who pays for even the modest shift” in quotas of at least 5 per cent to dynamic emerging markets and developing countries,” he said calling “on the advanced countries to be more pragmatic and share a greater part of the burden of the shift.”
Mukherjee suggested “constructive discussions on governance reforms that would enhance the effectiveness of Fund” rather than “discussions regarding creating new bodies for which the support is inadequate.”
India also expected an early resolution of the issue of Board size and composition, he said and looked forward “to an enhanced representation of emerging markets and developing countries and a more equitable distribution of chairs in the Executive Board amongst the regions of the world.”
Mukherjee said India was encouraged by the progress made so far in implementing new reform measures in the World Bank agreed at the last Spring Meetings of April 2010. But “We need to sustain the progress and ensure that the Bank achieves new heights by adopting new level of reforms by 2015.”
Earlier, addressing the plenary session, Mukherjee said while worst of the global financial crisis “may be behind us, the period of tribulation is not over yet.”
“We have to remain vigilant about threats to the fragile recovery materialising in this fragile phase of repair and rebuilding,” he said noting the world “addressed the challenges posed by the recent global crisis with the strength of international resolve and coordination,”
“Our response gave us the confidence that together we can secure global financial stability in an environment of balanced and sustainable economic growth,” Mukherjee said.
But “There is a long haul ahead of us as we strive to recoup the loss of output, employment and welfare as the global crisis took its toll, but the key lesson of the crisis is also that collectively and cooperatively, backed by political will, we can do what it takes to realise our goal which in the common interest of all.
(Arun Kumar can be contacted at [email protected])