Reform of Bretton Woods Institutions: The IMF Might Not Live to See Its Anniversary

A key issue confronting finance ministers and central bankers is reform of the International Monetary Fund. A major element of the system was fixed exchange rates for the currencies of participant countries and credit for countries in need, explains Valentin Katasonov for Global Research, a publication of the Centre for Research on Globalization based in Canada. The idea for the IMF was born 70 years ago, and a nation’s vote weight was determined by its participating share of capital – with the United States taking a controlling interest. The 2008 global debt crisis revealed the IMF was short on capital. A recent quota review would make China’s the third largest quota member with Brazil, India, China and Russia among the fund’s 10 largest stockholders, but the United States is blocking that adjustment. Katasonov suggests “The Fund’s reputation is plummeting” as China increasingly provides big loans to developing nations without political conditions. If the United States continues to balk on reform, other impatient countries may form an alternative organization. – YaleGlobal