Global Policy Forum

By M. Ziauddin

Countries identified internationally as supporters of terrorism and those with corrupt and undemocratic regimes are not likely to get IMF assistance and its advice.

At a recent question-answer session held at the National Press Club in Washington DC, IMF managing director Horst Kohler explained the Fund's policy in this regard. He, however, qualified this policy by stating that the IMF on its own cannot square the circle, according to the transcript of the Q/A session put on the IMF website.

The questioner had asked if the IMF should make loans to countries identified as supporters of terrorism. Mr Kohler in his reply said: "Certainly not, but the IMF is not - how should I say - the Lord who knows everything. And the Fund cannot square the circle. We have an assessment. We go to the countries with all of the best experts we have in order to assess the situation. We are often in a situation, not knowing exactly all the details of the situation."

He said the Fund should be even more careful, particularly in the field of corruption of undemocratic regimes, not to work with them, "but this is then, also, an issue of our shareholders to come more clearly out how they see this country and the cooperation with this country."

Mr Kohler believed writing off debts was not the right way to help poor countries and in his opinion if debt relief went again in the pockets of corrupt people then the very purpose of providing the relief to that country would be nullified.

He said debt relief should be combined with improvement in policies, but "we should not ask from the debtor countries the impossible on statistics... but in the end, we also want to see some response in better policies."

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