U.S. legislation snubs IMF reforms

The US Congress has passed spending legislation without key funding necessary for International Monetary Fund reforms aimed mainly at giving emerging economies greater voting rights at the institution.

The move is certain to make it more difficult for the IMF’s Quota and Governance Reform plan to be implemented by the deadline set at the end of this year.

The spending legislation includes funding for US government agencies through to next September. Future debate on the IMF reform plan may now take place without the country.

To carry out the reforms, the Congress of the United States – the largest stakeholder in the Washington-based institution with 17 per cent of voting rights – needs to shift US$63 billion from an IMF special crisis fund to a general account.

Some Republican lawmakers, however, have opposed the budget change, arguing it would effectively ask the world’s biggest economy to spend more despite budgetary constraints.

“I have expressed my disappointment to the US authorities and hope that they continue to work toward speedy ratification,” IMF head Christine Lagarde said.