© Reuters. International Monetary and Financial Committee (IMFC) Chair Nadia Calvino and International Monetary Fund (IMF) Managing Director Kristalina Georgieva arrive for a news conference during the annual meeting of the International Monetary Fund and the World
By David Lawder and Andrea Shalal
MARRAKECH, Morocco (Reuters) -International Monetary Fund countries on Saturday failed to agree on a U.S.-backed plan to boost IMF funding without giving more shares to China and other big emerging markets, but pledged a “meaningful increase” in lending resources by year-end.
IMF steering committee chair Nadia Calvino told a news conference that the promised increase in quota funds would ensure “an adequately resourced IMF that can ensure financial stability” but declined to describe the terms of the pledge.
Calvino, the Spanish economy minister, said the International Monetary and Financial Committee (IMFC) was unable to reach consensus on a joint communique amid disagreements over conflict language, despite many member countries condemning both Russia’s invasion of Ukraine and the killing of civilians in both Israel and Gaza.
She said she would issue a chair’s statement as IMF-World Bank annual meetings in Morocco closed.
But language was still being negotiated late on Saturday afternoon, sources familiar with the talks said.
An official from a G7 country with direct knowledge of the talks said there was no consensus on the quota increase nor clarity on whether the year-end timing was a hard deadline. The IMF had been due to complete its latest quota review by Dec. 15.
CHINA PUSHBACK
The U.S. Treasury plan for countries to contribute new quota funds in proportion to their current shareholdings, unchanged since 2010, had won support from G7 countries, India and a number of other emerging markets.
But China continued to push back against it. People’s Bank of China Governor Pan Gongsheng said in a statement to the IMFC that China wanted both a quota increase and a realignment of shares “to reflect members’ relative weights in the global economy, and strengthen the voice and representation of emerging markets and developing countries.”
IMFC members agreed to add a third IMF Executive Board chair to represent African countries, a key sweetener for the U.S. “equi-proportional quota plan. Pan said China supported this but it this was a separate issue from the shareholding formula.
“Quota realignment is fundamental to IMF’s governance reform, while other measures are its complements,” he said.
SINKING FEELING
Forging a deal to boost the IMF’s $1 trillion in lending firepower to enable it to respond to another large scale economic crisis was one of the biggest tasks for IMF Managing Director Kristalina Georgieva at IMF-World Bank annual meetings this week in Morocco.
But the week was overshadowed by the growing conflict between Israel and Gaza, and Georgieva closed the event with an ominous warning that it was adding to global economic uncertainty.
“I can say the shock people have felt, it came in our meetings,” Georgieva said, noting that these sentiments shifted from attacks on “innocent civilians” in Israel to “the necessity to now find ways to prevent the loss of civilian lives in Gaza.”
“What we see, of course, is a recognition that this is yet another source of uncertainty,” she said, adding that much would depend on its scope and duration.