India has yet to announce extra resources for the International Monetary Fund because of “practical” considerations, not because it’s waiting to be granted more voting power within the Washington-based lender, Finance Minister Pranab Mukherjee said.
The “presumed” conclusion is that Brazil, Russia, India and China “will contribute to increase the fund on fulfillment of certain conditions,” Mukherjee told reporters in Washington today. “It is not the case,” he said, adding “there are some practical problems of making an announcement at this meeting.”
Governments last week committed more than $430 billion in fresh money to the IMF, nearly doubling the fund’s firepower, to help it protect the world economy against deepening debt turmoil in Europe. While the U.K. and South Korea were among those making specific pledges, Brazil said emerging markets would condition their help on being handed more power within the IMF.
While Mukherjee said he had obtained Prime Minister Manmohan Singh’s approval over the telephone to commit funding to the IMF, the normal practice is to get the approval of the Cabinet. That process to determine the amount of resources India will contribute has yet to be completed, he said.
There were similar problems with other BRIC nations announcing a specific amount at this time, Mukherjee said. The Russian representatives to the meetings said the formation of their country’s new government wasn’t yet complete, while Chinese officials said “they will take time to adjust their internal process of decision-making,’” Mukherjee said.
Brazil’s Finance Minister Guido Mantega said that the so-called BRIC nations will outline their pledges before June’s G-20 summit in Los Cabos, Mexico. Mantega said aid should be tied to commitments to give emerging markets a bigger say in how the IMF is managed. The U.S. and other nations have yet to ratify a 2010 agreement to increase the voting power of such economies.
While 70 percent of the votes are needed to approve the proposed quota reforms, there is still a “shortfall” of about 15 percent to 16 percent, Mukherjee said today. Negotiations are also ongoing about further reforms beyond the ones proposed in 2010, he said.