BRICS nations have threatened to withhold the additional financing requested by the International Monetary Fund to help fight the sovereign debt crisis, unless they gain more voting power at the IMF.
“We are however concerned at the slow pace of quota and governance reforms in the IMF,” said in a statement earlier today.
This dynamic process of reform is necessary to ensure the legitimacy and effectiveness of the Fund. We stress that the ongoing effort to increase the lending capacity of the IMF will only be successful if there is confidence that the entire membership of the institution is truly committed to implement the 2010 Reform faithfully.
The emerging markets seem to be leveraging the fact that the IMF needs their money to help fight the debt crisis. In arguing for more voting power before they agree to the additional financing, the BRICS nations seem to be negotiating wisely. BRICS staged a race for Christine Lagarde’s spot at the IMF and they have wanted more of a role in both of the World Bank and IMF for quite a while.