Additionally, several emerging economies argue that fairer representation at the IMF is long overdue, particularly considering the relative sizes of their economies and their generous contributions to the bailout fund. New York Times Capital Flows: Countries that used controls during the financial crisis have better weathered the storm than those that did not - a statistic that suggests the IMF should reconsider more vocally.
Reflecting the increased significance that member countries attach to the promotion of good governance, on January 15,the Executive Board held a preliminary discussion on the role of the IMF in governance issues, followed by a discussion on May 14,on guidance to the staff.
Directors were strongly supportive of the role the IMF has been playing in this area in recent years through its policy advice and technical assistance. The IMF contributes to promoting good governance in member countries through different channels.
First, in its policy advice, the IMF has assisted its member countries in creating systems that limit the scope for ad hoc decision making, for rent seeking, and for undesirable preferential treatment of individuals or organizations.
To this end, the IMF has encouraged, among other things, liberalization of the exchange, trade, and price systems, and the elimination of direct credit allocation. Second, IMF technical assistance has helped member countries in enhancing their capacity to design and implement economic policies, in building effective policymaking institutions, and in improving public sector accountability.
Third, the IMF has promoted transparency in financial transactions in the government budget, central bank, and the public sector more generally, and has provided assistance to improve accounting, auditing, and statistical systems. In all these ways, the IMF has helped countries to improve governance, to limit the opportunity for corruption, and to increase the likelihood of exposing instances of poor governance.
In addition, the IMF has addressed specific issues of poor governance, including corruption, 2 when they have been judged to have a significant macroeconomic impact.
The responsibility for governance issues lies first and foremost with the national authorities. However, there may be instances in which the authorities are not actively addressing governance issues of relevance to the IMF. In such circumstances, the staff should raise their specific concerns in this regard with the authorities and point out the economic consequences of not addressing these issues.
The IMF is primarily concerned with macroeconomic stability, external viability, and orderly economic growth in member countries. The contribution that the IMF can make to good governance including the avoidance of corrupt practices through its policy advice and, where relevant, technical assistance, arises principally in two spheres: Thus, the IMF should be concerned with issues such as institutional reforms of the treasury, budget preparation and approval procedures, tax administration, accounting, and audit mechanisms, central bank operations, and the official statistics function.
Similarly, reforms of market mechanisms would focus primarily on the exchange, trade, and price systems, and aspects of the financial system. In the regulatory and legal areas, IMF advice would focus on taxation, banking sector laws and regulations, and the establishment of free and fair market entry e.
In other areas, however, where the IMF does not have a comparative advantage e. Nevertheless, the IMF needs to take a view on whether the member is able to formulate and implement appropriate policies.
Criteria for IMF Involvement 8. The staff should, however, address governance issues, including instances of corruption, on the basis of economic considerations within its mandate. In considering whether IMF involvement in a governance issue is appropriate, the staff should be guided by an assessment of whether poor governance would have significant current or potential impact on macroeconomic performance in the short and medium term and on the ability of the government credibly to pursue policies aimed at external viability and sustainable growth.
The staff could draw upon comparisons with broadly agreed best international practices of economic management to assess the need for reforms. As regards possible individual instances of corruption, IMF staff should continue raising these with the authorities in cases where there is a reason to believe they could have significant macroeconomic implications, even if these effects are not precisely measurable.
Such implications could arise either because the amounts involved are potentially large, or because the corruption may be symptomatic of a wider governance problem that would require changes in the policy or regulatory framework to correct.
Instances could include, for example, the diversion of public funds through misappropriation, tax including customs fraud with the connivance of public officials, the misuse of official foreign exchange reserves, or abuse of powers by bank supervisors that could entail substantial future costs for the budget and public financial institutions.
Corrupt practices could also occur in other government activities, including the regulation of private sector activities that do not have a direct impact on the budget or public finances, such as ad hoc decisions made in relation to the regulation of foreign direct investment.
Staff recommendations could include improvements in government management processes and systems that would have the beneficial side effect of preventing a recurrence of corrupt practices or advice to the authorities to seek the assistance of competent institutions for advice in these areas.
Governance issues are relevant to all member countries, although the problems differ depending on economic systems, institutions, and the economic situation.
The mode of IMF involvement will have implications for the manner in which governance concerns are addressed by staff in different member countries.
Article IV Consultation Discussions In Article IV consultation discussions, the staff should be alert to the potential benefits of reforms that can contribute to the promotion of good governance e. The potential risk that poor governance could adversely affect private market confidence and, in turn, reduce private capital inflows and investment—even in countries enjoying relatively strong growth and private capital inflows—should also be brought to the attention of the authorities.
IMF policy advice should also make use of the broad experience of countries with different economic systems and institutional practices and be based on the broadly agreed best international practices of economic management and on the principles of transparency, simplicity, accountability, and fairness.
In the case of international transactions that involve corruption, the staff should pay equal attention to both sides of corrupt transactions and recommend that such practices be stopped if they have the potential to significantly distort economic outcomes e.
Use of IMF Resources The IMF was established on December 27, in Washington on the recommendations of Bretton Woods Conference. But it started working on March 1, The fund has member countries accounting for more than 80 per cent of total world production and 90 per cent of world trade.
The purpose of the. International Monetary Fund and World Bank Table of Contents The IMF also has an International Monetary and Financial Committee of 24 representatives of the member-countries that meets twice yearly to provide advice on the international monetary and financial system to the IMF's staff.
The International Monetary Fund (IMF) and the World Bank are institutions in the United Nations system. They share the same goal of raising living standards in their member countries. Their approaches to this goal are complementary, with the IMF focusing on macroeconomic issues and the World Bank.
(25) Q.2 Write a detailed note on the role of World Bank and IMF in international politics. (25) Q.3 Analyze the present situation of Palestine issue. Also discuss the role of Organization of Islamic countries (OIC) in resolving this issue.
International organisations and transnational education policy Stavros Moutsios* Introduction: the enhanced role of World Bank/IMF, WTO and OECD in education policy whereas nation-state politics is becoming the arena where transnational politics is elaborated.
The World Bank/IMF, the OECD and the WTO are pivotal in the respect, as. At the annual Spring Meeting of the International Monetary Fund (IMF) and the World Bank, the IMF's member countries authorized proposals that will increase the influence of a few emerging economies, such as China and Turkey.