America is stalling International Monetary Fund reforms at its own peril. Finance ministers attending the group's spring meeting blasted Congress' refusal to support more lending power for the fund and a bigger voice for the likes of China and Brazil. Harsh words alone won't do much. But votes against loans to Ukraine and other US-backed projects would inflict a high price on foot-dragging.
Largely Republican critics in Congress argue that the reforms proposed in 2010 will reduce American influence and the nation's ability to control how its contributions are spent. Yet, the measures would preserve a US veto over major IMF decisions, cutting Europe's voting authority instead. And, an organisation that has paid the US about $30 billion in loan interest over the past three decades without losing a dime of taxpayer money deserves more confidence from Uncle Sam.
The IMF is a cost-effective advocate for US policies. American taxpayers will, for instance, stump up only $1 billion in credit guarantees designed to help Ukraine align with the West. The IMF's proposed loan, however, will probably be at least 14 times that amount. The fund has also devoted enormous resources to US priorities like stabilising Eastern European nations after the collapse of the Soviet Union.
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America's partners at the IMF are clearly losing patience. The G20, representing the world's largest economies, has already put a year-end deadline on Congress, and what have so far been mere threats could well turn into actions that would seriously harm American interests. Uncle Sam's best option is not to call its critics' bluff.
