IMF's very reason for existing takes a hit

THE IMF's membership has long called for a decision on future Fund resources no later than end-2019.

The Fund's resource base faces peril. US President Donald Trump's administration will not support an IMF quota increase, largely because it does not want to see a strengthening in China's woefully underweight position. China's voting power is around 6 per cent, yet it accounts for more than 15 per cent of the global economy. It deserves a boost in return for good reforms.

Meanwhile, US legislation provides that the country must withdraw in 2022 from the Fund's New Arrangements to Borrow (NAB) - a US$250 billion emergency backstop for IMF quotas - unless Congress acts otherwise. Bilateral borrowings of US$435 billion - the final defence after the NAB - could expire next year. The loss of NAB and bilateral resources would leave the IMF dangerously underfunded.