Indian has made headway in its move to get a greater say for developing countries in the running of the International Monetary Fund ( IMF) and World Bank (WB).
IMF managing director (MD) Dominique Strauss-Kahn on Saturday said the aim is for a shift in quota share to dynamic emerging markets and developing countries by at least five per cent from over- represented to under- represented countries by January, 2011.
Addressing a press conference after the two- day IMF- World Bank meet, Strauss- Kahn said he expected IMF members " to agree in either days or weeks on needed reform of the institution". "We are still not there, but not far off. Still some divergent views, but I am used to this. I think we are on the right track," he said.
India has pressed for a revision in the quota formula in the IMF based on purchasing power parity (PPP). It has demanded five to six per cent rise in the voting power for emerging economies in the 186-nation body.
Indian finance minister Pranab Mukherjee had in his address at the meeting called for shifting more voting power in favour of emerging market economies in IMF as they represented around 47.5 per cent of the global economy, but had only 39.5 per cent share in the multilateral lending body.
Strauss- Kahn expressed optimism about completing a series of reforms that will make the IMF more reflective of the new global economy by increasing the say in the Fund of dynamic emerging markets now leading the world out of recession.
He said countries getting an increased quota share needed to play a correspondingly bigger role in stabilising the global economic system. They cannot be a free rider.
"The more they are at the centre, the more they need to take part in stabilising the system. That is the logic," he asserted.
Mukherjee had at the meeting called for shifting more voting power on the IMF board to emerging market economies as they represented around 47.5 per cent of the global economy, but had only a 39.5 per cent share in the multilateral lending body.
The two- day meeting, however, however, concluded without finding any resolution to the US-China tussle on the currency issue, which is expected to reverberate at the G- 20 meet next month in Seoul.
The US wants exchange rates based on market fundamentals and is of the view that China has undervalued the yuan. The Obama government wants Beijing to raise the exchange rate of the yuan but the Chinese government is staunchly opposed to the move.
Strauss-Kahn said one of the reasons for currency to be dominating the meet is that global economic recovery is so uneven.
He said some parts of the world are having high growth, while others have low growth and large capital is flowing to regions which have growth.
Finance minister Pranab Mukherjee voiced his opposition to any move towards building a currency war and called for engaging the concerned countries.
"The matter cannot be resolved through confrontation, but through consensus, and we should engage in the process of building up consensus," Mukherjee said.
Strauss-Kahn said there is no way to believe global growth could be rebalanced without changing some currency value " because it is clear that we are going to have high growth in one part of the world and low growth in another part of the world".
(With inputs from agencies)