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Kristalina Georgieva
The International Monetary Fund wants to increase contributions by its members by 50% to provide a financing resource to countries that need its help.
"Increasing the quotas would increase the permanent resources of the IMF and strengthen the quota-based nature of the fund, reducing the dependence on loans and thus guaranteeing the main role of quotas in the resources of the IMF," the statement of the financial organization also stated, quoted from BTA.
The proposal envisages that once the quota increases take effect, borrowing resources, including the Bilateral Borrowing Agreements and the New Borrowing Arrangements, will be reduced.
"The proposed quota increase comes at a difficult time for the world economy. In the spirit of international cooperation, I hope that this proposal will garner the widest possible support from members and that we will then make progress on quota realignment," says Kristalina Georgieva, Managing Director of the IMF.
The Executive Board requested that the Board of Governors vote on this proposal by December 15. For it to be approved, a majority of 85% of the total number of votes is needed.
The IMF is financed through contributions (quotas) from each member state. The amount of the contribution is determined according to a formula that expresses the share of the country in international payments, as well as its GDP. 25% of each country's quota to be paid in Special Drawing Rights (SDRs) and the remaining 75% in local currency.
According to data from the Bulgarian Ministry of Finance, the Bulgarian quota is 896.3 million SDR.
The funds collected are spent on granting loans to countries experiencing temporary difficulties with their monetary balance. In return, they undertake to fulfill certain commitments, to carry out reforms. Bulgaria had eight such agreements with the IMF between 1991 and 2004.
The size of the contributions affects the credit resource to which the member state will have access and the votes with which it participates in decision-making. By default, each country is entitled to 250 base votes plus one for every 100,000 SDRs of its quota.
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