Speech

Stanley Fischer
International Monetary Fund
IMF Atrium, Washington, D.C.
October 1, 2001

Introduction

Mr. Chairman - Horst, Shige, Eduardo, Jack, Tom, Chris, Ratna: I cannot thank you enough, each of you, for your kind words and I cannot thank you and the other organizers of this wonderful event - and here I would like to thank by name, in alphabetical order, Jim Boughton, Robert Chote, Carlos Cornelio, Tom Dawson, Massoud Etemadi, Frances Hardin, Rebecca Kudla, Pedro Marquez, Julio Prego, Marina Primorac, Brian Stuart, Johannes Heinrich Wolff, and Denio Zara - enough for all the work you have done and all the creativity you have demonstrated - what a great show and what wonderful gifts I have received.

It is an enormous pleasure to see so many friends and colleagues here today, and I would like to thank all of you for coming. I am absolutely overwhelmed by the generosity of all of you, from the MD - whose kindness to me was evident also at the formal farewell dinner and the Board just over a month ago, to the Executive Board, and to all the members of the staff, those who have contributed to this farewell by working on it for so long, and those of you who have contributed by coming today. And let me thank you also for those wonderful gifts, which ensure I will never forget my years at the Fund - not that I was ever likely to do so in any case.

Your coming is all the more meaningful as the terrible events of September 11 still dominate our minds. The loss of life and the implications of what happened that awful day will take a long time to comprehend and heal. But the tragedy should make all of us value even more the Fund's driving spirit, a spirit of cooperation in which people of all nationalities and religions work together for the common good. And it should remind us of the values that most of us share: a belief in freedom, tolerance, transparency and openness. This spirit and these values are surely part of the answer to the questions posed by the terrible acts carried out last month, and they should encourage all of us to redouble our efforts to make the world a better place for all its people.

As you can imagine, my decision to leave the Fund after seven fascinating and rewarding years was a very difficult one, and I took the decision with deeply conflicting emotions. My leaving has not been made any easier by the series of farewells that started in the last week of August. Those farewells - at a formal dinner hosted by the MD, at the Board, with Department Heads, with the senior staff women's group, and others - have have been delightful opportunities to reminisce. But they have been sad occasions too, as they remind me of what I will be missing when I am no longer here.

Today's event is the most difficult farewell of all. You, the staff of this institution, are its greatest strength. Somehow, in ways I do not fully understand, the staff of the Fund rises to every challenge, producing high class work, no matter how tight the schedule, or how difficult the intellectual difficulties. Beyond the undoubted abilities of the staff, there is an esprit de corps, a dedication to getting it right, that enables all of us together to operate consistently at levels that surpass any reasonable expectation.

I have heard several speeches about what I may have done in the last seven years, and I have been immensely touched by the generosity of what has been said. But among the statements I will treasure the most is one made by the SAC, saying that I raised intellectual standards in the Fund and strengthened our sense of mission.

One other thing: I am deeply aware that whatever I may have done, it was not an individual effort. As you know I liked working directly with staff, and relied heavily on the work done by you. And sometimes I.was supporting initiatives that enabled the staff to fulfill their potential - such as training. You have been an enormous source of strength and support to the international community through the seven eventful years we have worked together.

To all of you, thank you for all you have done, every day, and in rising to every challenge.

Strengths of the Staff

Looking around this room, I see so many people with whom I have worked closely during the time I have been here. But there are some of you with whom I have interacted who I do not know by sight, for whom my part in your working life may have been limited to unwelcome telephone calls, awkward emails, requests to fill in the details on the staff contact system, or time-consuming comments on papers you sent for clearance. And for others, our paths may not have crossed at all. But let me say that I appreciate enormously the work that all of you do to ensure that this institution does the best it can for our members. And most of our member governments and the citizens of their countries greatly appreciate your work too.

Whenever any member of the staff was criticized during his period as Managing Director, Michel Camdessus would always say: "But he or she has been a loyal servant of the Fund for five (or it might be twenty five) years". Loyalty is indeed a defining characteristic of Fund staffers, along with your talent and capacity for hard work.

Given the loyalty and commitment you show to your work, I know that many of you feel disappointed, and often upset, when your work prompts hostility from parts of the academic and NGO community. You joined the Fund because you want to make the world a better place for the people who live in it - and I firmly believe that you are helping to do so.

Of course, it would be delightful if all we ever heard was praise and gratitude. But life is not like that. Criticism is only to be expected - indeed it is a sign that what we do matters, and that our advice makes a difference to people's lives. Economic policymaking involves making judgments about what is best and what is achievable in uncertain political environments and with far-from-perfect information. Reasonable people are bound to disagree with some of our decisions, and to criticize us accordingly, and we have to put up with it - indeed, constructive criticism keeps us on our toes.

When criticisms are constructive, we need to respond constructively. When the criticisms are unfair and ad hominem, we - the management, the Executive Board, and member governments - should return your loyalty and stand up in public for what you are doing and what we are asking you to do.

More on the Staff

To most people outside this building, the Fund is all about crisis management. And indeed crisis management is a very important part of what we do. Crises have brought out the best in the people of this institution and it was enormously impressive to see how you, the staff, managed to work under very difficult circumstances during the worst of the turmoil, whether in headquarters or on mission. That goes too for our Resident Representatives around the world - whom I continue to believe are an underused resource of the Fund.

There have been occasions as well - too many of them - when staff have put themselves in physical danger in order to do their jobs. One such incident took place in Sierra Leone, following the coup in May 1997. Rampaging soldiers broke into the house of the Resident Representative, Mr. Khenissi, extorted money and looted the premises at gunpoint. Mr. Khenissi and his family were later evacuated with help from the U.S. embassy in Freetown, under very difficult circumstances. I spoke to Mr. Khenissi when he returned to Washington, and he was completely matter-of-fact about what he had done and what he and his family had gone through.

The Fund is full of many other unsung heroes. Through surveillance, technical assistance and lending, the Fund provides valued services to nearly all our 183 members, in good times as well as bad. The authorities in our member countries appreciate all you do for them, most of the time, although some of them are obviously easier to deal with than others.

There is a nice story about my former adviser, the late Owen Evans, during negotiations with the Cambodians after the end of the Pol Pot regime. At some point, Owen raised an issue which the Cambodians did not want to discuss. The Cambodians looked furious, unstrapped their guns from their holsters, and banged them down on the table between the two sides. Supposedly Owen, a smoker, blanched, and then said: "Well, if we're going to negotiate like that, I hope you don't mind if I have a smoke", and--so I'm told--reached over and took a cigarette from the Cambodian side of the table. Peace was restored.

Annual and spring meetings are other occasions when staff go the extra mile for our members, thousands of miles on the occasions when we meet outside DC. These events have always involved a huge amount of extra work, but they are an essential opportunity to meet with our members and for them to tell us what we ought to be doing.

Of course, these events have become much more difficult over the last couple of years as the anti-globalization protests have gathered pace. In addition to keeping visitors away, the protests have also kept some of our staff in the building overnight - which happened last spring - and subjected some of them to abuse and intimidation, as happened in Prague. No-one can promise that this will not happen again. But it is essential that we do not allow the protests to seal us off from the people we serve.

Much of my work has been with economists. But there are many people and professions who contribute to keeping this institution running. There are administrators and assistants, security staff, librarians, IT experts, accountants, lawyers, writers, editors, translators, human resources specialists, and press and external relations people. You all play an essential role, without which the Fund could not function as well as it does. Thanks to all of you.

Thanks to individuals

Let me take a minute to thank some of the people who kept me running:

The first task of the day was usually to visit the cafeteria for breakfast. I've often wondered what those of you who saw me taking my muffin and coffee and walking straight out thought about whether the FDMD paid for his breakfast. The truth is that I had a special arrangement with Teo Villagra, in which I paid first and took the food later - and I hope Teo will confirm what I say. Thank you, Teo, for your cheerfulness and efficiency, and thank you everyone else who serves us so well in the cafetaria and the dining room.

If I have a reputation for around-the-clock efficiency, then much of the credit should go to Keila Moses, who runs the office of the FDMD. DMDs and even FDMDs come and they go, but Keila seems to be eternal. She was here before I arrived in the morning and after I left at night. She knows where every piece of paper is and worried about the details of every trip I took. Her loyalty is beyond imagination and - Keila - I am enormously grateful to you. The same goes for Ernie Parham, whose quiet efficiency and good humor can always be relied upon at the most difficult of times. Thanks also to David Naismith, who must have broken the speed record for trips to Dulles and Reagan National on many occasions - and somehow we are still both here to tell the tale.

Let me thank also the succession of superb advisers who have worked for me, sharing all the paperwork and the effort, but not enough of the glory: Mohamed El-Erian, David Burton, the late Owen Evans, Dan Citrin, and Ratna Sahay; and thanks too to Robert Chote, my speechwriter. Each of you has made a great contribution, and each helped to keep the show on the road. Thanks to all of you for your work as Advisors, and additional thanks to Ratna for all you have done to organize this farewell

A big part of my working life at the Fund was spent chairing the Board. At the Board farewell, I thanked the Executive Directors for their friendship and for the remarkably collegial way in which they carry out their difficult and sometimes conflicting responsibilities. I should also like to thank Ali Hassan and Robert Boykin for their efficiency in organizing the Board's day-to-day workings, and the various members of the Secretary's Department, especially Shail Anjaria, for their reassuring presence at my left hand. And of course, no less important, thanks too to the staff who bring in the tea and cookies at points when spirits start to flag.

However there is a question about the tea and cookies. The problem can be exemplified by what happened during the famous night session on Mexico at the beginning of February 1995. Somewhere around 10 p.m. a large supply of sandwiches, tea, and coffee, was brought up to the Board room. The Chairman of that Board meeting, Michel Camdessus, sent firm orders that the refreshments were to be kept safely locked up, to make sure that the Board would not receive any sustenance that would encourage them to keep the discussion going one moment longer than necessary.

While it will be sad to leave you all, I take comfort from the fact that you are in good hands. Let me again thank you, Mr Managing Director, for your cooperation and friendship over the last 18 months, which I greatly appreciate. During that period you have set the course the Fund should take in the coming years, most notably in your speech at the annual meetings in Prague last year, and you have obtained the support of the membership for your priorities. I am sure that the Fund will continue to prosper under your leadership. I would also like to express my deep thanks to Michel Camdessus, with whom I was fortunate to form such a remarkable working and personal relationship.

Let me also say that I am delighted that Anne is taking over from me as FDMD. She is and long has been a firm believer in the Fund and the values it promotes. Throughout the period the Fund was under attack in academia and elsewhere, she was a valued advocate of the role of the Fund, and I am sure will make that case logically, firmly, and convincingly in her new role. We overlapped here during August, my last month on the job, and that went very well - we even arranged that the Argentina crisis take place during that month so that she could gain necessary experience.

I know that both Horst and Anne are keenly aware that the performance of the Fund depends on the performance of the staff. This means investing in staff, for example through training. I was especially pleased during my tenure to see the success and growth of the internal economics training program, organized under the auspices of the IMF Institute. I would particularly like to thank Mohsin Khan for accepting the challenge of strengthening economics training, and for more than meeting the challenge. Management has already made a commitment to increase the number of days of training a year that we offer to staff. This is essential if we are to remain on top of our rapidly changing subject matter and thereby deliver the best possible advice we can to our members.

Another important investment for staff is in our working environment. One area of work in which I did not anticipate having so much fun before I got here has been the planning of our buildings. Phase III, with this lovely gallery, was completed in 1998 and now HQ2 is getting under way - and I'm sure that HQ2 too will come in under budget and looking very good.

We also need to ensure that staff are able as best as possible to balance their work and family lives. Fund staff work hard and many of you spend a lot of time on the road. This places a considerable burden on your families and I would like to thank them too - and my family as well, and that of course means primarily Rhoda, without whose support and love none of this would have been possible.

Finally, it is important that our staff reflect our membership. HRD has made important strides in ensuring diversity. Yet there are many member countries with talented people who have a lot to offer the Fund, but who remain seriously underrepresented in our ranks. It is essential that we do what we can to bring them on board, and to ensure that once on the staff everyone has the same chances to move up in the organization. In this regard, let me urge those responsible for promotions to make sure that they pay due attention to the need to promote diversity in the Fund - and contrary to what I am often told, this can typically be done not only at no cost to the ability of the Fund to do its job, but rather to our mutual benefit.

I know that these priorities and others that affect the well-being of the staff are at the forefront of the Managing Director's mind, for we have often discussed these issues.

Now a word of thanks to my former colleagues in management and among the heads of department - many of whom have been among my closest colleagues here at the Fund. First, let me thank my Deputy Managing Director colleagues: P.R. Narvekar, Alassane Ouattara, Shige Sugisaki, and Eduardo Aninat. In various combinations, we have worked productively together, in almost complete harmony. Those working relationships, and your friendship, are among the finest memories we will take away from the Fund. And here, as in an earlier farewell speech, I would like particularly to mention Alassane Ouattara, a close friend and a man of outstanding ability, decency, and integrity.

Two weeks ago I had a wonderful and touching informal farewell lunch with the heads of department. Although it is invidious to single out any individual, let me briefly record my gratitude to a fellow imminent retiree, Jack Boorman, who has stood as a rock of good sense, consistency, and integrity over the years, and also to the author of the first email I received every morning, Tom Dawson, who has done so much to help bring the Fund out of the darkness of secrecy, into the light of transparency. And I should also thank by name all the other Heads of Department and staff members with whom I worked so closely over the years, but if I were to start, I would not know where to end.

Challenges

All in all, the Fund is fortunate indeed to have such strong leadership, consisting of management, the Executive Board, and the senior staff - not least because the institution confronts important challenges.

Let me mention just four.

First, there is the need to deal with the backlash against globalization. That was clear even before September 11 and before the annual meetings had to be postponed. It now becomes an even more serious issue, possibly a deadly serious issue. I believe that the best way to make progress in the public debate over globalization is to move away from pointless, emotionally charged arguments about being for it or again it. What we need to ask is what policies are most likely to deliver equitable growth, what problems may arise in the process, and how should we deal with them. We need to recognize that this is a debate taking place in the media, in academia, on the streets, and in policy circles. We need to listen and respond to the critics. We need to develop simple, appealing messages that will be convincing in the court of public opinion. But we should not apologize for the fundamental beliefs and values on which this great institution is based, and which have brought so much benefit to so many people in the period since Bretton Woods.

The second challenge is to help reduce the volatility of international capital flows. We generally encourage countries to rely on the international capital markets. Yet the international capital markets seem to work imperfectly, and seem subject to excessive volatility. We need to make the markets work better. We need to do everything we can to prevent crises - and that effort accounts for a very large part of our work agenda, a part that is, I believe, quite successful. We also need to do everything we can to minimize the costs of crises. That includes the work on private sector involvement, PSI, which has been a disappointment so far. As part of that work, we need to develop a better framework to enable countries to reschedule debts. Such reschedulings or restructurings should not be costless, but the penalties should not be as severe as they are now - and here we should be encouraged by the recent agreement between the MD and the Secretary of the United States Treasury to work towards setting up an international bankruptcy court.

A third challenge - not just confined to the emerging markets - is to get the relationship between Fund conditionality and ownership on the part of our borrowing members right. Under the Managing Director's leadership, we have already made important strides in this area.

The final challenge I want to mention is our support for our poorest members - our part in the fight against poverty that has long been the most urgent moral imperative facing the international community. Before I joined the Fund I wrote an article criticizing the Fund's rhetoric on poverty and came close to suggesting that the Fund should be getting out of the poverty business. That was wrong. The issue is not whether we should take an interest in poverty, but whether we should continue working - and working better - with our poorest members. The answer is yes. We are a universal institution and it is our duty to do the best we can for the economic well-being of all our members.

Does this mean that we should take a direct interest in poverty? Yes it does. Why? Because policies will not be sustainable in poor countries, or anyway else, if they are perceived as inequitable. Nor will the countries that provide the resources we lend continue to do so if we are seen to support policies that are anti-poor. These are reasons based on realpolitik, but of course there is a moral argument too. And we should not forget it.

Strengths

These challenges are important and difficult. But the Fund is - you are - equal to them, and to the other challenges that are bound to come up in the future. That is because the Fund is built on firm foundations.

First, there is the continuing validity of our core objectives. The purposes of the Fund - as set out in Article I - remain as valid today as when they were drawn up in 1944. We promote principles of good economic citizenship, and provide a forum for countries to discuss issues of mutual interest. If we did not exist to fulfill these functions, we would have to be invented.

Second, the Fund is a universal institution. Thanks to the demise of colonialism and communism, there is barely a single economy of significance that is not a member of the Fund. That gives the Executive Board the authority of speaking on behalf of the international community.

Thirdly, and importantly, this institution and its staff draw on the vast experience of the economies of all 183 members. In surveillance, in technical assistance, and in the design of programs, we deal every day with the real world policy problems that confront the policymakers of our member countries. We are sometimes told we push countries too hard in IMF-supported programs, and sometimes we are told we are too soft. In trying to judge how far to push for stronger policies, I have found it useful from time to time to draw on a simple principle: never to ask a policymaker to do something that I would not be willing to do in his or her position.

Conclusion

Mr Chairman, friends, let me conclude by thanking you all once again for your friendship and support over the last seven years. It has been an enormous privilege to work at the Fund, with all of you. You should be very proud of what you do, I am very proud to have been associated with you for so long, and I am especially proud of the remarkably generous farewell statements that have been made today and during the past few months.

I wish all of you, and this great institution, all the best for the future.

Thank you all, and each and every one of you.