India opposes IMF move to raise quotas
The G-24 countries led by India and Brazil said the IMF reforms have failed to meet needs of low-income IMF members.india Updated: Sep 24, 2006 20:01 IST
India and other developing nations on Saturday, formally opposed IMF's move to raise voting rights of China, South Korea, Mexico and Turkey, saying it should be "kept in abeyance" until broad consensus was evolved on reforms in quota and representation system of the Fund.
However, the proposal is expected to get through with the backing of rich nations' grouping - G7 - which said the plan should lead to a stronger voice for low-income countries as well.
Meanwhile, a larger grouping of developing countries -- Group of 24 -- led by India and Brazil. The grouping said the proposed reforms of IMF voting rights failed to meet the needs of low-income IMF members.
In a joint statement, Finance Minister P Chidambaram and his counterparts in Brazil, Egypt and Argentina said the current process of IMF reforms should be "kept in abeyance and genuine attempt be made to work out a simple and transparent formula that is truly reflective of the economic standing of countries, while also protecting the position of low income countries."
"The disturbing picture that emerges is that some developing countries will be given increases by reducing the shares of some other equally deserving developing countries. This position is clearly unacceptable as it further erodes the credibility and legitimacy of the IMF," the statement said.
The joint statement was issued after nearly a 30-minute meeting by the four finance ministers on the sidelines of the annual World Bank-IMF meeting in Singapore.
India, Brazil, Egypt and Argentina were also actively and constructively engaged for several years with a view to build a "broad consensus" on the IMF reforms, the statement said.