pbs | The U.S. and others want the IMF to be able to do more lending. Under
the reforms, the IMF lending capacity would be bigger and borrowing
amount — based on the relative size of countries — will go up along with
the increase in quotas.
The way that the increase in the United
States would take place is by shifting some of our commitment that’s in
the form of credit provided to the IMF to become quota (i.e., our
shareholder stake).
So there are some doubts; people are asking,
is there risk involved to the U.S.? It’s not really a partisan issue
though. Republicans want there to be an IMF and want it to be able to
operate. Most people want there to be IMF reforms and a reduction of
influence of European countries, which is basically a hold-over of the
1940s and 1950s. It’s harder to strengthen the legitimacy of the IMF
without allowing emerging economies more influence.
Johnson recommends this primer from the Peterson Institute on why IMF reforms are important for the United States and how the U.S. is standing in their way.
But the House Foreign Affairs Committee has introduced legislation for an aid package without IMF reforms.
Yes,
the IMF reforms are being held up by House Republicans, but the
question is whether this is a matter of principle or a tactical move
since they’re trying to tie it to other things they want. There’s not a
big disagreement on the substance of those reforms.
The key
difference between the U.S. and any other country [approving the
reforms] is that the U.S. has to get the reforms passed through Congress
for them to become law. We are the hold up now. The quota increase only
goes through when 85 percent [of IMF shareholders] agree, and the
United States is the only country that has veto power because we have
such a big stake.
