Reserve Bank of India Governor, Shaktikanta Das on August 11th ordered for the set up of “expeditious completion” at the 16th general review of the quotas at the International Monetary Fund (IMF). It was pointed out that the same can help the multilateral lender assist distressed countries in a better and more comprehensive way.
While addressing a G20 seminar on the current global economy, organised by the Finance Ministry and the Reserve Bank of India (RBI), Das said the funding conditions of the IMF are such that they force a country that needs the money urgently look somewhere else because those conditions come with lots of riders and attendant stigmas. “My point is that corrective measures, including financing, should be put in place in a timely, non-stigmatised and more open access basis. For this, a bigger and stronger IMF that is capable of managing the levels of country-risk assumes crucial importance. This is more so since the IMF’s support is linked to the quota size of the member-countries, the 16th general review of the quotas and its attendant requirements, including governance reforms, need to be completed expeditiously,” Mr. Das said. He also talked about his recent experiences which suggested that poor countries facing financial difficulties go to other bodies beyond the IMF because of the perceived stigma or lack of access. According to him, the crucial role of the IMF and the World Bank in addressing global debt vulnerabilities cannot be overstated as they are at the centre of international monetary and financial system. Hence it is incumbent upon them to do a lot more for countries that suffer from debt distress.
The Governor further argued that such quota reforms besides enhancing the legitimacy of the IMF in its oversight of the international monetary and financial system will also work upon increasing traction for its policy advice.“We must not allow the burden of debt to stifle the potential for global growth,” Mr. Das said.
