Lagarde: Cant do much about reform without US support

Written by Reuters | Beijing | Updated: Mar 24 2014, 08:28am hrs
International Monetary Fund (IMF) chief Christine Lagarde said on Sunday there was not much she could do to push reform at her organisation and give emerging economies a bigger say without the support of the US.

China in January called on IMF member nations to stick to a commitment to give emerging markets more power at the global lender after US lawmakers set back historic reforms that would give developing countries a greater say.

The remarks by China's foreign ministry were an indirect criticism of the US, the biggest and most powerful IMF member, where lawmakers that month failed to agree on funding measures needed for the reforms to move forward.

The US Congress must sign off on the IMF funding to complete 2010 reforms that would make China the IMF's third-largest member and revamp the IMF board to reduce the dominance of Western Europe.

Speaking at Beijing's elite Tsinghua University, Lagarde said this was a matter for the US to complete the process and ensure that the relevant legislation can be passed. "This is not something I can do much about," she told students.

The reform of the voting shares, known as quotas, cannot proceed without the US, which holds the only controlling share of IMF votes.

Developing nations have long viewed the IMF with suspicion for promoting disastrous privatisations that complicated the transition from communism for some emerging nations in the early 1990s, and for pushing budget cuts that exacerbated debt crises in Asia and Latin America a few years later.