Washington: An upbeat India has made a forceful plea for giving emerging economies more voice in shaping the global financial architecture as the IMF and the World Bank acknowledged India and China as the world's lead engines of growth.
If Reserve Bank of India (RBI) Governor Duvvuri Subbarao projected a rapidly recovering India's growth at 8.0 percent this year, International Monetary Fund (IMF) officials expected India and China to keep growing at 8.8 and 10 percent respectively as Asia continues to lead the global recovery.
"As is now well known, China and India will again lead Asia's growth with growth rates of 10 and 8.8 percent this year," Anoop Singh, International Monetary Fund's Director of the Asia and Pacific Department told reporters Saturday after a meeting of the Fund's steering committee.
Youssef Boutros-Ghali, chairman of the International Monetary and Financial Committee (IMFC) of the 186-nation Fund, too acknowledged that IMF had changed in recent years, with emerging markets having a bigger say. "It's a different institution," he told reporters.
It was in this context that Subbarao asked the IMFC "to reshape and redefine its role and mandate" of the IMF in tune with the times giving emerging economies a voting share commensurate with their new clout.
Reiterating India's call for at least a 7 percent shift in quota shares in favour of the Emerging Markets and Developing Countries (EMDCs), Subbarao said only such a substantial shift would better reflect current global economic realities and would enhance the legitimacy of the Fund.
"If the clarification and refocusing of the mandate of the IMF is to have legitimacy, it should follow and not precede a change in the governance structure, including quota shares reflecting the present and emerging global economic realities, measured in the most appropriate manner rather than on the basis of an improved but still flawed formula," he said.
At the end of the first day of the regular spring gathering of the IMF and World Bank, the policymakers did commit to completing governance and quota reform at the IMF before January 2011.
"The aim is to reflect the shift in world economic power toward dynamic emerging market economies through a redistribution for quotas-which reflect the contribution of each member to the Fund and the relatively voting power," the IMF said.
At the Development Committee of the World Bank Group too, India Sunday gave a call for giving the group "a new sense of purpose and direction with enhanced governance and strength" to play a lead role in eradicating poverty and fostering development globally.
Noting that the Bank's entire effort to eliminate poverty is played out in Developing and Transition Countries (DTCs), Ashok Chawla, Secretary, Department of Economic Affairs said the "changing dynamism of the global economy and the evolving weights of developing economies need to be reflected in the governance structure of the World Bank."
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