Typical street scene in Santa Ana, El Salvador. (Photo: iStock)
July 7, 2008
Tackling imminent crises tops the coming work agenda for the International Monetary Fund.
IMF Work Program for period ahead emphasizes importance of drawing lessons from global financial market turmoil (photo: Tetra Images/Corbis)
IMF WORK PROGRAM
The IMF will focus its activities on key issues of global economic and financial concern, shifting the emphasis away from internal reforms toward the actions the Fund can take to help its members meet the challenges of the 21st century, IMF Managing Director Dominique Strauss-Kahn said in outlining the IMF's Work Program for the period ahead.
"It is time to turn the page. Our work on restructuring the Fund is now well advanced, but our work on refocusing the Fund is only beginning," Strauss-Kahn told the Executive Board during the discussion on June 18, 2008. "The principle guiding our work will continue to be responsiveness to our members' needs with a focus on the Fund's comparative advantage."
The IMF's Board of Governors in May overwhelmingly approved a broadening of the Fund's investment authority, a key element of the proposed new income model for the IMF that will allow the institution to generate revenues from a variety of sources. The previous month, Governors adopted by a wide margin far-reaching reforms of the institution's governance, supporting measures to increase the voting shares of a majority of the 185 member countries.
Refocusing the IMF
Strauss-Kahn, who took over as Managing Director in November last year, said the IMF aimed to make substantial progress over the next several months in four areas of priority:
1. Enable member countries deal with imminent crises and urgent tasks. Issues include:
• Helping the world economy respond to the challenges posed by rising food and fuel prices. The Work Program sets out how the Fund can make a contribution in this urgent area through its policy advice, financial support, and analytical work. The IMF released on July 1 a major analysis of the impact of rising commodity prices, particularly on vulnerable states.
• Drawing lessons from the financial market crisis. The Work Program emphasizes the importance of drawing lessons from the global financial market turmoil and the need to strengthen further the Fund's financial sector work at the country level.
• Advancing key surveillance issues. The Work Program points to how the Fund's core bilateral surveillance work can be strengthened; and how it can advance efforts on multilateral as well as regional surveillance, global spillovers and cross-country issues, and early warning systems.
2. Take a fresh look at the IMF's lending instruments. The Work Program points to the need for the Fund to adapt some of its lending instruments and related policies, including access rules, so it can continue to provide a good option for countries facing volatile capital flows and limited access to private capital. A review of Fund lending instruments and related policies, including access, is proposed before the Annual Meetings in October.
3. Put in place new organizational tools and working practices. This will include ensuring greater cohesiveness in the IMF's approach to low-income country work; more dedicated research and focus on macro-financial linkages; and possible new approaches across a range of the Fund's responsibilities and services including Article IV annual consultations and capacity building programs.
4. Further advance the IMF's governance agenda. Building on the recent achievement to strengthen membership representation through quotas and voice improvements, the second stage of governance reform will now proceed. The Work Program indicates that the recent review by the Fund's Independent Evaluation Office of governance arrangements provides a useful starting point for this effort.
Strauss-Kahn emphasized that the IMF's Work Program is focused on "the actions that the Fund will take to help our members meet global challenges. We aim to make substantial progress over the next few months but, in a number of areas, the work will continue beyond the Annual Meetings."
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