Editorial: Strengthening the I.M.F.

Written By Unknown on Sabtu, 30 Maret 2013 | 13.25

Let's face it: the International Monetary Fund is not widely loved. It has forced countries in financial distress to adopt counterproductive austerity policies, and it failed to anticipate the financial crisis. But in recent years the I.M.F. has helped stabilize the global economy, most recently by providing loans to troubled European countries like Greece and Ireland. That is why Congress needs to strengthen its governance and bolster its resources by ratifying reforms to the organization that were agreed to in 2010 by its 188 member countries.

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The changes, which were primarily devised by the Obama administration, would double, to about $755 billion, the fund's capital, which has fallen sharply as a percentage of the global economy in the last decade. Another measure would give developing countries a bigger say in the fund's management, to reflect their recent growth. The reforms would do all this without increasing America's financial commitment to the organization and while preserving Washington's power to veto any big changes to how it operates.

Most of the world's countries have endorsed the changes, as have dozens of economists and former American officials representing both parties. But Congress, which must pass legislation before the measures can be implemented, has not even considered them. The administration is partly to blame. It did not send the proposals to Congress until this month, when it asked that they be included in the continuing resolution meant to forestall a government shutdown. Senate Democrats did not include them because they feared that House Republicans would use the proposed reforms to hold up the entire bill. Some Republicans distrust international organizations in general, and some believe that the I.M.F. does not need more money.

The reality is that the I.M.F. is the world's primary defense against global financial disasters. Increasing the fund's resources will ensure that it can respond quickly to another wave of turmoil in Europe or elsewhere that would inevitably hurt the American economy. Enacting these reforms is also important because doing so will signal to developing countries like Brazil and India that the United States wants them to play a bigger role on the global stage. That has been a priority for Republican and Democratic administrations alike.

These changes are in America's interest. The administration needs to make a strong public case for why they are important, and Republican lawmakers need to look beyond their aversion to international entanglements and vote for them.


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