A month after the scandalous decision to postpone the deadlines for completion of the 15th IMF General Quota Review from 2017 to 2019, adopted by the Fund’s management actually behind the back of the international community, the IMF Executive Board has finally decided to publish a timetable for its implementation.

Previous Quota Review, called “2010 IMF Reform”, has been agreed at the G20 summit in Seoul. The implementation of this review provided a slight increase in the share of developing countries in the Fund’s capital. At the same time the leaders of the largest world economies have agreed, that the process will be continued on the basis of the quota formula revision. However, immediately after the approval of the outcome of the reform in January 2016, the IMF management has done everything possible to halt further redistribution of quotas. USA, being the only member country with veto right in the Fund, as well as their European allies, have solved their own problems caused by 2008-2009 crisis, have once against started to show, how little they are actually willing to consider the interests of other states.

For instance, at the G20 summit, held in early September 2016 in Hangzhou (China), it was stated, that the 15th General Quotas Review will be completed before the end of 2017. Despite this, in late September, the IMF Executive Board has provided the Board of Governors of the Fund with report, claiming, that it won’t be able to perform the 15th Review within the specified timeframe, and asking for a grace period of another two years. Naturally, this postponement has been granted.

Thereby the Western countries, instead of negotiating with the emerging economies within the G20 frameworks, where all the participants have equal vote rights, are seeking to decide on the matter within the framework of the IMF, which is in fact accountable to them. This step evidences their wish to neutralize the increased role of developing countries, primarily the BRICS, by retaining control over key international financial institutions.

In accordance with the work plan, submitted by the IMF Executive Board, it is supposed to begin consideration of major issues, associated with the new quota formula, quota size and distribution matters, only in the third quarter of 2017. At the same time, at the first stage, which is until spring of 2018, the focus will be given to “soften up” those Executive Board members, who disagree with the Western agenda. In line with this, in addition to ordinary publishing of reports prepared by the Fund officers, the IMF management is planning to hold seminars and informal briefings, which should “facilitate progress” already before the start of crucial discussions in the Executive Board.

It is expected that the International Monetary and Financial Committee will formulate key principles for the implementation of the 15th General Review in the second quarter of 2018. Then, on the basis of these principles, the Executive Board will continue discussions with the aim of achieving consensus by the spring of 2019 (latest by fall 2019). [1]

However, meanwhile the time is not on the side of the West. Having received a reprieve, the BRICS countries have an opportunity to agree at the expert level the new quota formula that will allow considering the real contribution of each state into the world economy. Having set public discussion up against backroom bargaining, which is being practiced by Western countries, the BRICS will ensure an opportunity to establish a broad coalition in support of further reform of the IMF and its transformation into an organization that truly ensures financial security for the entire international community, and not just for a select number of countries.

 

[1] Fifteenth General Review of Quotas—Report of the Executive Board to the Board of Governors, October 21, 2016. URL: http://www.imf.org/external/np/pp/eng/2016/102116.pdf