WASHINGTON: Reaffirming the urgency of making the 2010 quota and governance reforms effective by October to enhance the International Monetary Fund's legitimacy and credibility, its steering committee has called for an agreement by January 2013.
"We look forward to an agreement, by January 2013, on a simple and transparent quota formula that better reflects members' relative positions in the world economy," the International Monetary and Financial Committee (IMFC) said in a communique after a meeting here in Washington.
Finance Minister Pranab Mukherjee represented India on the 24-member committee that serves as the steering committee of the 188 member international lender.
Urging members to ratify the quota and governance reforms expeditiously, the committee said it "will ensure that the IMF has the tools and resources to effectively support the membership and welcome the directions in the Managing Director's Action Plan".
Any realignment is expected to result in increases in the quota shares of dynamic economies in line with their relative positions in the world economy, and hence likely in the share of emerging market and developing countries as a whole, the committee noted.
But "steps shall be taken to protect the voice and representation of the poorest members", the committee assured.
Welcoming recent initiatives on Fund surveillance, the committee said the current surveillance framework should be significantly enhanced.
"Strengthening surveillance should bring together bilateral and multilateral perspectives in Fund policy advice and enable better assessment of global and country level risks and spillovers to economic and financial stability, and engage more effectively with policymakers," the communique said.
The IMFC has a key role to play in regularly guiding strategic and operational priorities for Fund surveillance, it said noting the next Action Plan provides an opportunity to report on progress.
The next IMFC meeting will be held in Tokyo Oct 12-13, 2012, the communique said.
The committee said it remained committed to take the necessary actions to secure global financial stability and welcomed "the euro area members' decisions in March to strengthen European firewalls as part of broader reform efforts and the availability of central bank swap lines".
(Arun Kumar can be contacted at firstname.lastname@example.org)