CALCULATION PROCEDURE FOR OBTAINING THE QUOTA AFTER THE IMF REFORM: CHANGES IN SINGLE PACKAGE

Abstract

The International Monetary Fund (IMF) keeps plans to complete the review of country quotas in 2019. The country’s quota in the IMF determines the amount of its financial obligations to the Fund; the number of votes in the Fund and the country’s access to financing depend on this quota. Lastly, these shares were redistributed in 2010 under the 14th revision of quotas, when IMF total capital was increased by 100%, and only 6% of the quotas were transferred to developing countries. However, the total share of developing countries in the Fund is only 42.5%; the remaining 57.5% belong to developed countries. The G20 has previously approved a roadmap according to which the quotas for IMF shareholder countries should be redistributed by the new formula until 2019. Countries with emerging economies should gain more weight in this institution, created to maintain the financial stability of its participants, while traditional shareholders should lose some of their share. However, earlier this formula could not be agreed because of the US counteraction. Indeed, currently, the allowable ratio of debt to GDP is revised upward in most countries, with these changes most noticeable in countries with emerging markets. It is expected that for such countries, the debt index may exceed the level observed at the beginning of the global financial crisis of 2008-2009. The developed countries with a debt burden exceeding 100% of GDP remain vulnerable as well. As a result, the probability of long-term preservation of low GDP growth rates increases. At one time, Cooper’s group refused to use the debt index, believing that it could cause certain “moral problems”: the states would be interested in debt build-up to increase their quota in the IMF.