Christine Lagarde, managing director of the International Monetary Fund (IMF), said Friday that the organization is disappointed with the U.S. inaction to ratify the governance and quota reform, and is ready to discuss alternative ways without the United States to give emerging countries greater voting power.
"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.
To reflect the growing and underrepresented influence of the emerging economies, the IMF quota reform calls for a 6 percent 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 reform, however, has been delayed for four years due to the block of the U.S. Congress as the U.S. retains a veto. Lagarde has been grilled by this issue and hinted at a "Plan B" in April if the U.S. fails to endorse the reform by year-end.