Lagarde backs G20 call for faster reforms at IMF

Christine Lagarde, managing director of the International Monetary Fund (IMF) on Sunday said she agreed with G20 leaders' call for expeditious implementation of the quota and governance reforms at the global financial institution.

"I strongly agree with the G20's urging all our member countries to implement the IMF's 2010 Quota and Governance Reform as soon as possible," she said in a statement.

The G20 leaders, especially members of the emerging economy group, today expressed disappointment at the slow pace of quota reforms at the IMF and urged the United States to ratify them to make the institution more effective and representative.

"We are deeply disappointed with the continued delay in progressing the IMF quota and governance reforms agreed in 2010 and the 15th General Review of Quotas, including a new quota formula," said the G20 communique after the 2-day meeting of the group's leaders in Brisbane, Australia.

Frustrated by the stalling tactics of major developed countries, mainly the United States, emerging counties like India, China, Brazil and Russia, which have been seeking increased voting rights in IMF to better reflect their growing share in world economy, has announced plans to launch a special lending arm of the BRICS grouping.

The IMF quota reform, once implemented, will increase India's voting share from the current 2.44 per cent to 2.75 per cent, following which the country will become the eighth largest quota holder at the IMF, up from the 11th position.

Lagarde said G20 leaders' agreement to boost global GDP by over $2 trillion over next five years would require decisive policy action by all to make growth strong, sustainable, balanced and inclusive, and to create needed jobs.

"This is a commendable effort, with significant benefits for the global economy. Implementation is now critical, with a strong accountability framework to monitor progress, supported by the IMF," she said.