WASHINGTON, D.C. The International Monetary Fund (IMF) said on Wednesday (Thursday in Manila) it would begin working on alternatives to its stalled, five-year-old reform program after passing another year without the required ratification by the US government.
In a proposal mapped out by the IMF executive board, the global crisis lender will take six months to see what can be salvaged from the 2010 reforms, originally backed by Washington, the IMF’s largest shareholder, but now blocked in the US Congress.
The IMF did not say what the so-called “Plan B” could entail. And it appeared hopeful that the 2010 package, which doubled IMF funding and increased in a small way the voting power of emerging economies like China, could be completed.
But the 24 member executive board said in a statement to the broader board of governors of the Fund that it “deeply regrets” that the 2010 reforms remain blocked, adding that this has caused it to miss deadlines in work on a subsequent, more sweeping quota review.
The executive board proposed taking until June 30 to come up with new measures “that represent meaningful progress towards the objectives of the 2010 reforms.”
The United States, as one of the key founders of the IMF and the world’s largest economy, controls 16.7 percent of voting rights in the Fund.
That gives it an effective veto over any major initiative, as reforms require 85 percent of total voting power to pass.