IMF emerges with its authority enhanced<\/p>\n
WASHINGTON (AFP): The International Monetary Fund, the target
\nof sharp criticism during the Asian financial crisis, has emerged
\nfrom the ordeal a more transparent institution and with its
\nauthority enhanced.<\/p>\n
The Asian meltdown, which erupted in Thailand with the
\ndevaluation of the baht July 2, 1997, sparked a veritable
\n"revolution" in the way the IMF does business, its managing
\ndirector, Michel Camdessus, told AFP in a recent interview.<\/p>\n
The crisis forced the Fund to improve its strategy for
\npreventing financial upheavals and to open itself more to public
\nscrutiny.<\/p>\n
As market unrest spread from east Asia across the Pacific to
\nBrazil and Russia, the IMF stepped in to organize international
\nbailout packages worth more than 100 billion dollars for
\nThailand, South Korea and Indonesia.<\/p>\n
Of this total the IMF committed US$35 billion of its own
\nresources, as well as $18 billion approved last December to shore
\nup Brazilian defenses against the global contagion.<\/p>\n
At the height of the turbulence, the IMF was pilloried,
\nnotably in academic circles and in the United States Congress,
\nfor having failed to foresee the threat to once-booming Asian
\neconomies.<\/p>\n
Its rescue initiatives were then denounced as misguided
\nattempts to compensate imprudent overseas investors and
\ncreditors.<\/p>\n
IMF initiatives favoring budget cuts and higher interest rates
\nwere seen in other quarters as imposing recessions on the
\nrecipient countries and harming the interests of the poor.<\/p>\n
Today, however, the crisis itself is in recession and modest
\nrecoveries are under way in some of the worst-hit economies.<\/p>\n
For Camdessus, the events of the past two years have
\nhighlighted the critical need for transparency, both among IMF
\nmembers and in the operations of the Fund itself.<\/p>\n
Prodded by the U.S. Congress, which for years has complained
\nabout IMF's penchant for secrecy, the Fund has taken steps to
\nimprove its communication skills.<\/p>\n
The annual evaluation of member economies by the IMF executive
\nboard, program letters of intent and the state of IMF finances
\nare now made part of the public record, an effort bolstered by
\naccess to the Internet.<\/p>\n
The Fund has even called in a public relations firm to improve
\nits image.<\/p>\n
IMF member governments are now strongly urged to make
\navailable macroeconomic data for tables published by the Fund on
\nthe Internet. The IMF in addition develops and publicizes
\ntransparency standards for central banks.<\/p>\n
Parallel with the new emphasis on candor is an accent on
\npreventive measures.<\/p>\n
At its April general meeting the IMF approved a new lending
\nscheme called "contingent credit lines," under which assistance
\nis mobilized for countries that have been faithful in pursuing
\nIMF reform measures but who nonetheless find themselves
\nthreatened by external instability.<\/p>\n
The goal, according to Camdessus, is "to act not after the
\ncatastrophe but before it" and to convince vulnerable countries
\nto put in place sound debt management policies and realistic
\nexchange rates.<\/p>\n
The IMF has likewise examined its own structure and is
\nconsidering transforming its interim committee, which provides
\npolicy advice, into an actual council with decision-making
\npowers.<\/p>\n
The transformation, actively promoted by France, would
\n"demonstrate that governments are taking full responsibility for
\ntheir policies," according to Camdessus.<\/p>\n
But consensus on the move is far from assured. The idea in
\nparticular is opposed by the United States, fearful -- according
\nto some analysts -- that it will weaken its influence in the
\nFund.<\/p>",
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