AS I SEE THINGS: Changing roles of the IMF
LAST WEEK, a good friend and colleague sent me an email message with a link. I clicked on the link and immediately recognised the caption: Help Jamaica Grow: The People’s Petition To The IMF. The petition read: “(1) Relax the 7 1/2 per cent of the GDP primary surplus set aside to service the debt, such that the primary surplus be reduced to no more than 5 1/2 per cent, leaving the remaining two per cent or more to be used to stimulate growth. (2) Relax the nine per cent ceiling on government expenditure on the public sector wages since the bulk of the public sector work force is employed in the security forces, education, and in health care, none of which should be reduced at the present time.”
Having internalised the message, the patriotic fibers in me instantaneously directed my intellectual attention to other Caribbean countries and their past and present associations with the International Monetary Fund (IMF), particularly those self-styled home-grown structural adjustment programmes (SAPs) of which we are all fully aware.
It is not my intention in this piece to scrutinise the contents of any past or present SAPs.
Instead, I believe it would be instructive to share with the public some perspectives on the IMF in relation to the roles and functions of this important institution and how it is adjusting to change.
Originally, the goal of the IMF was to “build a framework for economic cooperation that would avoid a repetition of the disastrous economic policies that had contributed to the Great Depression of the 1930s and the global conflict that followed”.
That meant that from time to time the IMF would lend countries funds to assist them to achieve stability on their balance of payments.
The fulfilment of that broad objective meant that the IMF was charged with the responsibility of providing inter alia “policy advice to governments and central banks based on analysis of economic trends and cross-country experiences; research, statistics, forecasts, and analysis based on tracking of global, regional, and individual economies and markets; loans to help countries overcome economic difficulties”.
With the massive changes that have taken place globally involving the evolution of development paradigms, the many currency and financial crises, and several worldwide recessions, the IMF was forced to adjust the way it did business.
Accordingly, “the IMF has emerged as a very different institution. During the crisis, it mobilised on many fronts to support its member countries.
It increased lending, used its cross-country experience to advice on policy solutions, supported global policy coordination, and reformed the way it makes decisions.
The result is an institution that is more in tune with the needs of its 188 member countries.”
Despite the changing role of the IMF, it is important to note that a country is free to determine the nature and extent of its involvement with the Fund.
That determination is often based on economic or political strategising.
With everything said in this column, your very own personal experiences now and in the past and the unique and sprouting roles of the IMF, do you think differently about that institution and what it does generally in relation to SAPs?
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