13 US isolated, to lose it's veto power in IMF World Bank, BRICS are not given more power, THEY ARE TAKING IT BY FORCE
US isolated, BRICS to get greater voting power at IMF
Months after the formation of new financial institutions like the $100 billion BRICS Bank and the China-led Asia Infrastructure Investment Bank,
Christine Lagarde, managing director of the International Monetary Fund
(IMF), said Friday that the organization is ready to discuss IMF voting
reforms without the United States to give BRICS and emerging countries
greater voting power.
Lagarde said the IMF is disappointed with the US inaction to ratify
the governance and quota reforms and will now move forward without
“The IMF’s membership has been calling on and was expecting the
United States to approve the IMF’s 2010 Quota and Governance Reforms by
year-end. Adoption of the reforms remains critical to strengthen the
Fund’s credibility, legitimacy, and effectiveness, and to ensure it has
sufficient permanent resources to meet its members’needs,” Lagarde said
in a statement.
“I have now been informed by the U.S. Administration that the reforms
are not included in the budget legislation currently before the U.S.
Congress. I have expressed my disappointment to the U.S authorities and
hope that they continue to work toward speedy ratification,” she said.
“As requested by our membership, we will now proceed to discuss
alternative options for advancing quota and governance reforms and
ensuring that the Fund has adequate resources, starting with an
Executive Board meeting in January 2015,” she added.
Earlier in September this year, inhttp://thebricspost.com/rousseff-lauds-brics-urges-unsc-reforms/#.VIvC9yipX8E,
Brazilian President Dilma Rousseff warned that international financial
institutions are in danger of losing legitimacy if developing countries
like BRICS are not given proper representation.
“It is also imperative to eliminate the disparity between the growing
importance of developing countries in the global economy and their
insufficient representation and participation in the decision-making
processes of international financial institutions, such as the Monetary
Fund and the World Bank. The delay in the expansion of voting rights of
developing countries in these institutions is unacceptable,” Rousseff
“These institutions are in danger of losing legitimacy and efficiency,” she added.
The IMF reforms will hand more IMF voting powers to BRICS, a
long-standing demand of the group and will also reduce the concentration
of representative power of Western Europe at the IMF board.
China and other emerging economies, including BRICS, have long
protested against their limited voice at global financial platforms,
including the World Bank, International Monetary Fund and Asian
The IMF quota reform calls for a 6 per cent shift in quota share to
emerging economies. It will lift China, which still has less voting
power than the Benelux countries ( Belgium, Holland and Luxemburg), to
the third largest shareholder. Shares for Russia, India and Brazil will
also see hefty rise.
The reforms, however, have been delayed for four years owing to a
block by the US Congress as the US retains a veto. IMF chief Lagarde
hinted at a “Plan B” in April if the US fails to endorse the reforms by