Global Policy Forum

New IMF Vision to Focus on

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Business Recorder
October, 2000

The International Monetary Fund is working on a new policy shift that would focus on the pressing issues of globalisation - the need to make it work for the benefit of all, while minimising its costs. According to a new Fund document, made available here on Tuesday, IMF Managing Director Horst Kohler has outlined his vision or the future of the Fund. Kohler sets out four crucial elements of his new vision.

  • "The first is that the IMF should strive to promote sustained non-inflationary growth that benefits all people of the world," he said.
  • The second is that the Fund should be the centre of competence for the stability of the international financial system.
  • The third is that it should work together with other institutions established to safeguard global public goods.
  • The fourth is that the Fund should be an open institution, learning from experience, and dialogue, and adapting continuously to changing circumstances.

    "In this vision," he says, "the IMF must be an active part of the workforce to make globalisation work for the benefit of all, acting as a partner to its members and as a provider of help for self-help."

    The IMF focus, he stressed, must be to promote macroeconomic stability as an essential condition for sustained growth. To pursue this, the IMF has to concentrate on fostering sound monetary, fiscal and exchange rate policies. Kohler said his ambition, he said, is "not to have more and more lending programs but to place crisis prevention and, thus, surveillance at the centre of the IMF activities." He added that, in its advice, "the IMF should show respect for the cultural and historical traditions of its member countries, and should not lecture." "While the IMF should maintain conditionality in its lending, he said, it must also work to enhance real ownership of programmes."

    On poverty reduction, Kohler says that the Poverty Reduction and Growth Facility (PRGF) is an innovative instrument in the IMF efforts to make globalisation work for the benefit of all, not least because it aims at tackling the root causes of poverty. He emphasised that disengagement from the poor countries would be inconsistent with the IMF mandate and would also deepen the divisions of the world. Also important, he said, was the work of strengthening the underpinnings for a productive private sector in developing countries. "Every day that passes unused for this work is a day lost in the fight against poverty," Kohler observed.

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    FAIR USE NOTICE: This page contains copyrighted material the use of which has not been specifically authorized by the copyright owner. Global Policy Forum distributes this material without profit to those who have expressed a prior interest in receiving the included information for research and educational purposes. We believe this constitutes a fair use of any such copyrighted material as provided for in 17 U.S.C § 107. If you wish to use copyrighted material from this site for purposes of your own that go beyond fair use, you must obtain permission from the copyright owner.