WASHINGTON, March 11 (Xinhua)-- More than 130 academics and policy pundits urged the U.S. Congress on Monday to enact the 2010 quota and governance reform package of the International Monetary Fund (IMF) and warned that failure to act would diminish U.S. leadership in global financial matters.
In a letter to John Boehner, the speaker of the House of Representatives, the signatories stressed IMF's crucial role in stabilizing the world economy and its importance to the United states.
"Additional quota resources for the IMF are essential to preserve its central role in a global financial system that benefits the United States," the letter said. "Realignment of IMF quota shares, while preserving U.S. influence in the IMF, will enable the IMF to respond to shifts in the global economy, involving emerging powers more deeply in the institution and avoiding their disengagement."
"Positive action by the U.S. Congress on both elements will also unlock financial contributions from other countries," it emphasized.
The letter also noted that the IMF reform legislation would maintain the current U.S. financial commitment to the IMF, by doubling the U.S. quota while commensurately reducing the U.S. commitment to lend to the IMF's New Arrangements to Borrow, a pool of fund supplementing the IMF's quotas in case of crisis.
In essence, it seeks authorization to transfer funds within the IMF that the U.S. Congress has previously approved, the letter said.
The IMF's Board of Governors approved a quota and governance reform package on Dec. 15, 2010. The package included a doubling of IMF quotas and a shift in quotas to dynamic emerging markets and under-represented countries, and a proposed amendment to reform the executive board that would facilitate a move to a more representative and all-elected executive board.
The IMF previously had intended to make the 2010 reform package effective before the 2012 Annual Meetings in October 2012, but the legislatures of some important IMF members including the United States, the IMF's largest shareholder, have not given the green light to the reform package. Legislation of U.S. Congress is needed to implement the reforms.
Some emerging economies have demanded for years more voting power in the IMF in line with their increased weights in the global economic system. The 2010 reform package will make China the third largest voting member in the IMF.
Edwin Truman, former assistant secretary of the U.S. Treasury for International Affairs, told Xinhua that the U.S. administration did not submit request to the Congress until recently. A provision of completing the IMF reforms was not inserted in the continuing resolution passed by the House last week. A decision is expected this week on whether it will be included in the Senate version of the government funding bill.
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