Journal Issue
Share
Article

Forum: Camdessus calls for IMF to adapt to changing times

Author(s):
International Monetary Fund. External Relations Dept.
Published Date:
October 2005
Share
  • ShareShare
Show Summary Details

How will the IMF, the World Bank, and other international financial institutions (IFIs) need to change over the next 10-15 years? This was the question asked—with particular focus on the IMF—by Michel Camdessus, IMF Managing Director from 1987 to 2000, in his Per Jacobsson Foundation lecture on September 25 in Washington, D.C.

He said the IFIs should continue to play a vital role in providing a global environment of stable and sustainable growth, helping emerging market countries develop, and helping the poorest countries reduce poverty. At the same time, they must help address a range of challenges including global current account imbalances, worldwide demographic transitions, and the global energy crisis.

But to continue performing these roles effectively, he said, the IFIs must adapt their missions, resources, and governance. And they need to do so in ways that take “on board the ethical requirements embraced by today’s public opinion”—good governance, public ownership of policies, and partnership between developing and developed countries.

Adapting missions

How might the IFIs’ missions adapt? Camdessus outlined three priorities:

Strengthening IMF surveillance. The preliminary conclusions of IMF staff missions for country consultations should be open to public debate. The IMF should also pay more attention to long-term, structural developments; focus more on international spillovers and the systemic impact of countries’ policies (such as global payments imbalances); and conduct more precise analysis, with the World Bank, of efforts to meet the Millennium Development Goals (MDGs).

Better equipping the IMF. The IMF must be equipped with “explicit competence and proper instruments” in the areas of capital account liberalization and orderly debt workouts, and for its role as an international lender of last resort. On capital account liberalization, “with the benefit of hindsight” [since the failed moves of 1997 to amend the IMF’s Articles of Agreement to give the IMF jurisdiction in this area], “we should now revisit the issue, taking advantage of the lessons learned.” As the international lender of last resort, the IMF should be authorized to inject international liquidity temporarily at times of crisis, through the creation and selective allocation of special drawing rights (SDRs).

Adapting financing instruments. All development partners should “concentrate their means and leadership in contributing to the MDGs.” The World Bank’s role as a long-term lender should be increased, including through greater concentration on infrastructure investment. And the IMF’s membership should reaffirm its mission in support of its poorest members “as an essential part of its purposes under the Articles [of Agreement],” provide higher access to its concessional windows, and not relax the discipline of conditionality, which he did not view as being in contradiction with country ownership of programs.

Adapting resources and governance

On IMF human resources, Camdessus called for “strengthening, not downsizing” its staff. On IMF financial resources, he reiterated his view on the need for “significant periodic increases in quotas” and also for periodic allocations of SDRs. And on adapting governance, he called for the introduction of a “Council”—a political decision-making body that would be responsible for the major strategic decisions relating to the IMF—as well as for reforms in the size and composition of the Executive Boards of the IMF and the World Bank and in the procedures for selecting the heads of the two institutions.

The full text of Michel Camdessus’s lecture, International Financial Institutions: Dealing with New Global Challenges— Per Jacobsson lecture 2005—is available on the Per Jacobsson Foundation website, http://www.perjacobsson.org.

Laura Wallace

Editor-in-Chief

Sheila Meehan

Managing Editor

Jacqueline Irving

Production Manager

Christine Ebrahim-zadeh

Conny Lotze

Senior Editors

Camilla Andersen

Assistant Editors

Maureen Burke

Lijun Li

Senior Editorial Assistants

Kelley McCollum

Editorial Assistant

Julio Prego

Graphic Artist

Graham Hacche

Senior Advisor

Prakash Loungani

Associate Editor

The IMF Survey (ISSN 0047-083X) is published in English, French, and Spanish by the IMF 22 times a year, plus IMF in Focus. Opinions and materials in the IMF Survey do not necessarily reflect official views of the IMF. Any maps used are for the convenience of readers, based on National Geographies Atlas of the World, Sixth Edition; the denominations used and the boundaries shown do not imply any judgment by the IMF on the legal status of any territory or any endorsement or acceptance of such boundaries. Text from the IMF Surveymay be reprinted, with due credit given, but photographs and illustrations cannot be reproduced in any form. Address editorial correspondence to Current Publications Division, Room 7-106, IMF, Washington, DC 20431 U.S.A. Tel.: (202) 6238585; or e-mail any comments to imfsurvey@imf.org. To request an IMF Survey subscription ($109.00 annually for private firms and individuals) or IMF publications, please contact IMF Publication Services, Box X2005, IMF, Washington, DC 20431 U.S.A.

Tel.: (202) 623-7430;

fax: (202) 623-7201;

e-mail: publications@imf.org.

The IMF Survey is mailed first class in Canada, Mexico, and the United States, and by airspeed elsewhere.

Other Resources Citing This Publication