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1 1 (December 17, 2015)

handle is hein.crs/govcbyz0001 and id is 1 raw text is: IMF Quota and Governance Reforms The International Monetary Fund (IMF, the Fund) is a multilateral organization focused on the global monetary system. In December 2010, the United States and the other IMF member countries agreed to a reform package. It addresses two major concerns about the institution: (1) the representation of emerging and developing economies at the IMF does not reflect their contribution to the global economy; and (2) the size of the IMF's financial resources has not kept pace with increased economic activity in the global economy. The reform package would double the IMF's capital base and update its governance structure. Specifically, it would increase IMF member contributions (known as quota) and voting power of developing and emerging market economies; reduce the total voting power of European countries; and reduce Europe's representation on the IMF's Executive Board, its main governing body. As introduced in December 2015, the FY2016 Omnibus bill includes language that would authorize and appropriate an increase in the U.S. quota at the IMF, as well as authorize the executive branch to vote in favor of the governance reforms. As currently structured, the two components of the 2010 reform package-the quota and governance reforms-are interlinked, and cannot be implemented separately. A double majority of the IMF membership (measured by voting power and number of total members) is required to adopt the reforms. For the quota increase, IMF members representing at least 70% of IMF contributions must consent to the increase and the governance reforms must be approved. The governance reforms must be agreed by three-fifths of the IMF's 188 members (113 members) having 85% of the IMF's total voting power. In many cases (including the United States) the reforms require parliamentary approval or authorization. Since the United States has voting power of 16.74%, the quota and governance reforms cannot take effect without U.S. ratification by the United States. Furthermore, enough countries have already approved the measures that U.S. approval would allow the IMF to proceed with the reform package. Depending on the budgetary treatment of any new authorized U.S. contributions to the IMF, appropriations may also be required. Total IMF quota contributions are approximately $331 billion. However, this figure represents just over 25 % of the IMF's available resources. In addition to its quota resources, the IMF maintains standing multilateral borrowing arrangements to temporarily supplement p\w -- , gnom go mppm qq\ , q I aS 11LULANJILiN, Updated December 17, 2015 available quota resources and borrowing. The main borrowing arrangement, the New Arrangements to Borrow (NAB), is a set of credit arrangements between the IMF and 38 member countries that can provide about $514 billion of supplementary resources to the IMF. Member countries also have established bilateral loan or note purchasing agreements with the IMF, which currently provide an additional $382 billion of financing to the IMF. Combining both quota and provisional resources, total IMF resources are approximately $1.23 trillion. IMF rules call for a review of quotas every five years to ensure that total IMF resources are adequate and that countries' quotas reflect their relative share in the global economy. Despite major growth and change in relative contributions to the global economy, there has not been a major quota increase since 1998. 4hat.is the Quota and Quota Increase and Voting Shares. The reforms would increase IMF quotas to approximately $736 billion and roll back contributions made in 2009 to the NAB. China, Brazil, South Korea, and Turkey, would see the largest increase in quota shares (Figure 2). In total, 6% of total quotas and voting power would shift to emerging market and developing countries. Figure I. Changes in IMF Quotas (percentage points) Largest Inu,crssLags Dc,reases, Chpin 3i e Jhd rabias-R 0 ore I Funbty CS0 Under mh prpoedreor pac a U.S fnania commitments to the IMF would not increase. Instead, about $56.7 billion of U.S. financial commitments would be transferred from the NAB to quota. The U.S. current quota commitment (about $58.5 billion) would approximately double to $115.2 billion. The U.S. commitment to the NAB (about $95.9 billion) would be reduced to $39.1 billion. .O 'T

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