## IMF Survey: As Contingency, IMF Aims to Double its Lendable Resources

_IMF News, February 2, 2009_

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## Bibliographic details
- Published: February 2, 2009

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### Overview
- Publication date: February 2, 2009.
- Context: IMF First Deputy Managing Director John Lipsky stated the IMF aims to double the amount of money available to lend to governments to $500 billion to strengthen international confidence during the global downturn.
- Purpose: Precautionary move to ensure the IMF can meet further demands if more countries seek IMF lending.

### Resource proposals and financing
- Current resources: "We have, through quotas and existing borrowing agreements, $250 billion in total."
- Proposal: "add contingent facilities that would double the resources available"—an additional $250 billion to reach $500 billion.
- Specific offers and targets:
  - Japan has offered to lend the IMF $100 billion.
  - The IMF aimed to raise an additional $150 billion beyond Japan's offer.
- Potential instruments mentioned:
  - Contingent facilities to give confidence that the IMF has the resources to respond if needed.
  - Consideration of issuing bonds (mentioned in an interview with the Wall Street Journal).
- Alternative funding approaches suggested by Montek Singh Ahluwalia:
  - A tripling of the IMF's quotas—capital provided by member countries.
  - A generalized issue of the IMF's Special Drawing Rights (SDRs).

### IMF lending activity and engagements
- Total committed lending so far: $47.9 billion to economies affected by the crisis, including Belarus, Hungary, Iceland, Latvia, Pakistan, Serbia, and Ukraine.
- Additional actions:
  - A precautionary loan for El Salvador announced the prior month.
  - An IMF team in negotiations with Turkey.
  - Other countries may need financing in due course.
- IMF assessment: "Right now the IMF has adequate resources to respond to the demands that we see in front of us immediately," but additional contingent resources are prudent.

### Economic outlook and prerequisites for recovery
- IMF assessment published January 28: world growth is forecast to fall to its lowest level since World War II; financial markets remaining under stress; global output and trade plummeting.
- Lipsky on recovery prospects:
  - With adequate policy response, including fiscal stimulus in advanced economies and some emerging markets, "the world could see a revival of economic growth toward the end of 2009 'and a return over the next year to trend growth. But decisive action will be needed.'"
- Conditions emphasized:
  - "A restoration of the health of the financial system was a precondition for economic recovery."
  - Governments must not fall into the "seductive trap" of focusing only on national priorities at the expense of international health.
  - The fall in oil prices and continued domestic spending by oil exporters would be an important source of support for the global economy.
- Risks noted: Capital flows to emerging markets have slumped, leaving those with large current account deficits vulnerable.

### Governance and reform recommendations
- Calls for IMF governance reform to improve representation of emerging markets and other developing countries.
  - Concern: European countries "should not have so many seats on the Executive Board" (Trevor Manuel).
  - Manuel is chairing a committee on IMF governance reform expected to report in April.
- Ahluwalia: Reform of the IMF should be a critical part of the agenda for the Group of Twenty (G-20) leaders meeting in London on April 2.
- Ahluwalia critique: "we need an IMF, but what we're doing is taking the IMF we invented in 1945 and putting Band-Aid on all kinds of bits and pieces. You need to go back a little bit to the drawing board."

### Key statistics and figures
- Target lendable resources after proposal: $500 billion.
- Current lendable resources before proposal: $250 billion.
- Additional contingent resources sought: $250 billion.
- IMF committed lending so far: $47.9 billion.
- Japan's offer: $100 billion.
- Remaining targeted funds to raise (after Japan): $150 billion.
- IMF membership cited: 185-member institution.
- Relevant dates:
  - Panel discussion at the World Economic Forum in Davos on January 31.
  - IMF assessment published on January 28.
  - G-20 meeting in London on April 2.
  - Governance reform committee expected to report in April.

*Source: IMF Survey: As Contingency, IMF Aims to Double its Lendable Resources (February 2, 2009).*

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## Content in this bundle

- [Pol020209aapdf (PDF)](/-/media/websites/imf/imported/external/arabic/pubs/ft/survey/so/2009/pol020209aapdf.pdf){rel="external" type="application/pdf"}
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- [Pol020209aspdf (PDF)](/-/media/websites/imf/imported/external/spanish/pubs/ft/survey/so/2009/pol020209aspdf.pdf){rel="external" type="application/pdf"}

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## References

- [https://www.imf.org/en/News/country-focus](https://www.imf.org/en/News/country-focus)
- [PRESS CENTER](http://presscenter.imf.org/)
- [Policy](https://www.imf.org/en/news/search)
- [IMF cuts growth forecasts](https://www.imf.org/external/pubs/ft/survey/so/2009/RES012809A.htm)
- [World's deepening crisis](https://www.imf.org/external/pubs/ft/survey/so/2009/NEW012109A.htm)
- [IMF on fiscal stimulus](https://www.imf.org/external/pubs/ft/survey/so/2008/INT122908A.htm)
- [Crisis shapes IMF priorities](https://www.imf.org/external/pubs/ft/survey/so/2008/POL121808A.htm)
- [IMF and the financial crisis](https://www.imf.org/external/np/exr/key/finstab.htm)
- [IMF's latest forecast](https://www.imf.org/external/pubs/ft/weo/2009/update/01/index.htm)
- [Special Drawing Rights](https://www.imf.org/external/np/exr/facts/sdr.htm)
- [https://www.imf.org/en/home](https://www.imf.org/en/home)

_Source: https://www.imf.org/en/news/articles/2015/09/28/04/53/sopol020209a_