By David Lawder
WASHINGTON (Reuters) -The U.S. Treasury will push for a general increase in International Monetary Fund quota resources this year that would be spread evenly across the institution’s membership, the department’s top economic diplomat said on Thursday.
Jay Shambaugh, the Treasury’s undersecretary for international affairs, said ahead of a G20 leaders summit in India that the Treasury is also pressing for ways to shore up the IMF’s fund for the world’s poorest countries, the Poverty Reduction and Growth Trust.
“We are making a commitment to reinvest in the IMF,” Shambaugh said in remarks at a Center for Global Development event. “This year, we will support an increase in quotas – for a broad increase across all members – with the goal of strengthening the IMF as a shareholder institution at the core of the global financial safety net.”
Shambaugh said the U.S. supports an “equiproportional” increase in quotas allocated in proportion to existing shares, while reducing the IMF’s reliance on borrowed resources. Larger quotas also would mean increases in the resources that member countries could access.
The IMF is aiming to complete a review of its quota resources — which form the biggest part of its $1 trillion in total lending firepower — by Dec. 15, and is seeking “considerable progress” by IMF annual meetings in Morocco in October.
The U.S. will also advocate for changes to the quota formula to make it more reflective of the global economy, giving greater weight to dynamic emerging market economies, he said.
Among the biggest winners of this process would be China, India and Brazil. Without naming them, Shambaugh said an important part of that process would be to ensure that countries “that would see and increase in share, are respecting the roles and norms of the IMF and working to strengthen the international monetary system.”
Any new quota formula would need to ensure that the voices of all countries are heard in the process.
“Changing shares without an agreed framework would result in upweighting a handful of countries at the expense of many others in an ad-hoc manner,” Shambaugh said.
(Reporting by David Lawder; Editing by Andrea Ricci)
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