US urges IMF reforms, rejects funding increase

The International Monetary Fund, like governments around the world, has to learn to do more with less and needs to be more effective, US Treasury Secretary Steven Mnuchin said Wednesday.

Key among the needed reforms is a focus on conditions for financial aid, and evaluation of countries' ability to manage debt, Mnuchin said in his statement to the IMF's steering committee.

The calls for "debt transparency" have been increasing in volume in the run up to this week's spring meetings of the IMF and World Bank, amid concern that a surge in lending by China to developing nations could sow the seeds of financial strife.

"Debt owed to emerging creditors is at a critical juncture, with debt levels rising among both low income/emerging and advanced economies," Mnuchin said in the prepared statement.

"Increasingly, opaque or unsustainable lending practices weaken investor confidence, erode governance and accountability and create a drag on economic growth."
He stressed the need for strengthened surveillance of member countries, including tighter conditions for lending, "to assure its members that it is delivering effectively on its core mission."
He cited the case of Argentina -- which has an IMF aid program worth about USD 56 billion -- and said the requirements "addressing weaknesses in monetary and fiscal policies helped to stabilise financial markets, putting the economy on track to return to growth."
"In our view, the IMF currently has ample resources to achieve its mission, and countries also have considerable complementary resources should a crisis emerge."