Despite an elegant solution that involved no new commitments of resources, the US Congress has refused to take up a long-delayed funding proposal for the International Monetary Fund (IMF). In the process, it has derailed a multilateral agreement that was hammered out back in 2010 ironically, in the eyes of the rest of the world, with President Barack Obama's administration taking a leading role. And it did so at a time when financial disruption in emerging economies is reminding the world of the importance of a strong stabilising anchor at the core of the international monetary system.
After the initial disappointment, many are hoping Congress will again take up the Obama administration's IMF request after a short interlude. It will certainly have several opportunities to do so while working on other financial legislation. But with congressional elections due this year, few are confident that lawmakers will be in any mood to change course until next year at the earliest.
This is an unfortunate and regrettable outcome for both the IMF and the international community as a whole. Congressional obstinacy is forcing the IMF to miss out on an opportunity to strengthen its finances at a time when most other countries have already approved the initiative. It is also being held back from addressing, albeit modestly, governance and representation deficits that have steadily eroded the integrity, credibility and effectiveness of this important multilateral institution.
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