• Global institutions

Global institutions

There is almost universal agreement that the International Monetary Fund (IMF) needs to reform its governance structure and operational approach. It needs to become more effective in monitoring international financial stability, addressing key economic issues, and in providing technical expertise to finance ministries. Regional meetings were held earlier this year (2008) in Africa, Central Asia, Latin America, and the Middle East to gather opinions on IMF reform. Finance minsters, central bankers, and senior advisers from these areas voiced there priorities for the IMF in terms of its roles, core functions, representation, and accountability. This report presents the recommendations that came out of this consultative process.

Recommendations on policy requirements include:

• ensuring maximum policy space, encouraging countries to design their own programs, and providing capacity training as requested
• providing countries with alternative approaches to achieve the agreed outcomes and to demonstrate the social and poverty impacts associated with each alternative
• insisting that all policy recommendations are derived from data and, are not theory driven
• ensuring that staff have in-depth knowledge of specific countries and regions and that missions extend their visits to deepen their knowledge as well as engage in broad consultations
• making fast-disbursing funds available in the event of exogenous shocks, with a minimum of additional conditions or delays

Some surveillance recommendations include ensuring:

• that surveillance of small countries quality and sophistication as larger economies
• surveillance of global imbalances advises on negative consequences for smaller economies when larger currencies are not in balance severely volatile
• equal treatment for all members of the Fund in adhering to recommendations contained in various surveillance studies

Better representation was also called for by expanding the voice and vote of developing and emerging market economies on the Executive Board. A need to incorporate greater diversity of nationalities, training and experiences in management and staffing at all levels of the fund was also identified. To improve accountability the managing director should be accountable to the board and not only to powerful countries. A complaint mechanism should also be set up so that governments can voice disagreements with staff recommendations. Board decisions should be made public in the shortest possible time.

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