WASHINGTON, Jan 2: Despite an average seven per cent economic growth in the last three years, India's stake in the International Monetary Fund (IMF) has taken a beating with the financial body deciding to increase its own share in its funds.From being fifth in the early years of IMF, India now ranks 13th in the size of its IMF shareholding in a list led by the United States. India's current quota is 3,555.5 million special drawing rights (SDRs) which will increase to 4,158.2 million SDRs. However, in terms of percentage, its share will be reduced from 2.090 per cent to 1.961 per cent.
Other countries of South Asia, except Bhutan and the Maldives, will also lose their relative importance in the world body when IMF's shareholding is increased from 146.226.1 billion SDRs or about 197 billion dollars to 212.029 billion SDRs or 287 billion dollars.
The IMF executive board has submitted a report and a draft resolution to the board of governors proposing an increase of four per cent in IMF quotas.The
governors have been asked to vote on the proposed resolution, without a meeting, by January 30. Adoption of the resolution requires a 85 per cent majority voting among the IMF membership. India's position in the IMF eroded gradually as the quotas were reviewed at intervals.
The latest is the 11th general review which increases the total quotas by 45 per cent. The deterioration in the Indian position is directly linked to the fact that when economies of some of the other nations grew faster, while India lagged behind.
After the latest review, Pakistan's shareholding increases from 758.2 million SDRs to 1,033.7 million SDRs but its relative share decreases from 0.519 per cent to 0.88 per cent.
Bangladesh's current quota is 392.5 million SDRs or 0.268 per cent which will become 533.3 million SDRs or 0.252 per cent, while Sri Lanka's 303.6 million SDRs or 0.208 per cent changes to 413.4 million SDRs or 0.195 per cent.
Nepal's 52 million SDRs or 0.06 per cent changes to 71.3 million SDRs or 0.034 per cent,
Maldives' 5.5 million SDRs or 0.004 per cent becomes 8.2 million SDRs with the percentage remaining the same, and Bhutan's 4.5 million SDRs goes up to 6.3 million SDRs but the percentage remains at the same level of 0.003. With a quota of 26,526 million SDRs, the US currently has 18.141 per cent of the IMF shareholding. This becomes 37,149.3 million SDRs or 17.52 per cent.
With 85 per cent majority required to adopt the new quotas, the US remains the only member with the right of veto.
The quotas proposed for each member were arrived at in the following manner: 75 per cent of the overall increase will be distributed among all members in proportion to their existing quotas and 15 per cent will go in proportion to members' shares in calculated quotas based on 1994 data.
Copyright © 1998 Indian Express Newspapers (Bombay) Ltd.
