Developing economies quota increase in IMF can play pivotal role in safeguarding global financial stability: CEA Nageswaran

The Chief Economic Advisor V Anantha Nageswaran on Wednesday said that the increase of developing economies quota in the International Monetary Fund (IMF) can play a pivotal role in safeguarding global financial stability by enhancing the multilateral lending agency's permanent resources.

Reforms Should Go Beyond World Bank and MDBs

Participating in an event organized by the finance ministry, Nageswaran said the reforms of international financial institutions have to go beyond the World Bank and multilateral development banks (MDBs). He said that the executive board of the IMF has proposed to the Board of Governors that a 50 percent quota increase should be allocated to members in proportion to their current quotas.

16th General Review of Quotas Likely to Provide Greater Say to Developing Economies

The 16th General Review of Quotas (GRQ) is likely to provide a greater say to developing economies in the International Monetary Fund. This quota increase can play a pivotal role in safeguarding global financial stability by enhancing the IMF's permanent resources and reducing its reliance on borrowed resources, he added.

G20 Leaders Committed to Revisiting Adequacy of Quotas

Nageswaran also pointed out that during the G20 summit in Delhi this year, the leaders remained committed to revisiting the adequacy of quotas and continuing the process of IMF's governance reform.

MDB Reforms Incomplete Without Similar Reforms of IMF

Also, speaking at the event, Niti Aayog vice chairman Suman Bery said MDB reforms are incomplete without similar reforms of the IMF. Reforms of international monetary order need to come back to center stage, Bery said. He said India is going to attract more global finance. But, we are not in a world where global financial structure is supportive of long-term growth, he added.