Friday, September 23 2005 09:45 Hrs (IST) - World Time -

Washington: The International Monetary Fund has called for revising its quotas and representation in the IMF for 'emerging' nations like India and developing countries.

Fund Managing Director Rodrigo de Rato said the current situation was unsustainable, making a case for their revision.

"Fair weight and voice, are crucial to the legitimacy of a universal institution. The current allocation puts this legitimacy at risk in many regions, for example in Africa, where the Fund is heavily engaged, and in Asia, whose place in the world economy has grown far more than its role in the Fund," Rato said.

He said the rising importance of regional institutions, as a step to global integration was a generally 'positive' development except insofar as they also represented a symptom of 'unhappiness' with representation at the global level.

"In the view of too many, governance and ownership imbalances in the Fund now rival global current account imbalances. Neither imbalance is sustainable," he said.

Rato said the coming thirteenth general review of quotas presented "An opportunity to come to grips with the issue. On quotas, even if it turns out that there is no basis for a general increase, we must put on the table the option of reallocating existing quotas."

He stressed that consideration must be given to various proposals that have emerged, such as the provision of more basic votes and consolidation and reallocation of chairs in the Executive Board.

He said that with the political will, it would be possible to find a solution to the issue.