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IMF Blog (13)

After a late flurry of additions to the founding membership of the Asian Infrastructure Investment Bank (AIIB), attention now turns to setting the China-led AIIB’s rules and regulations. But important questions remain – most important, whether the AIIB is a potential rival or a welcome complement to existing multilateral financial institutions like the World Bank.
Tuesday, 14 October 2014 10:40

Washington after Fortaleza

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Four months after the BRICS (Brazil-Russia-India-China-South Africa) launched their New Development Bank and Contingent Reserve Arrangement (CAR) at a Summit held in Fortaleza, Brazil, the World Bank and IMF convened for their Annual Meetings. For all the fanfare that met the announcement of the BRICS’ new financial infrastructure, not a lot has changed.
Thursday, 10 April 2014 16:14

Divided US Congress hampers IMF Reform

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From 11 to 13 April, thousands will gather in Washington, DC for the annual Spring Meeting of the International Monetary Fund (IMF) and the World Bank Group. The key issue on the table will be IMF reform. Waning US leadership of the process is threatening the stability of the global economy, says Christopher Wood ahead of the meeting.
Wednesday, 22 January 2014 11:01

The death of IMF reform?

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In a serious blow to democratizing global governance, US Congress has rejected a funding request from the Obama administration that would have reformed the International Monetary Fund (IMF). The move leaves the 188-nation group without additional resources and blocks an increase in voting power for China, India, Brazil and other emerging markets.
Thursday, 10 October 2013 10:32

Why we need (but will not soon get) IMF reform

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Reforming the IMF is one of the most important challenges for international financial policy in 2013. The IMF is the world’s premier multilateral financial institution, but its effectiveness as a manager of global crises and protector of global financial stability is threatened by the failure of the international community to complete the reform package that was agreed upon in Seoul in November 2010.
In her spring statement on the International Monetary Fund’s (IMF’s) work program, Managing Director Christine Lagarde stated that “completing the 2010 quota and governance reform is essential to the Fund’s legitimacy and effectiveness.
Thursday, 21 February 2013 11:29

The World Economy After Davos

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Two thousand five hundred participants, protected by 4000 Swiss troops, gathered in Davos in late January to chew the cud on all matters “global”. The mood reflected the clear blue sky above the snow-capped peaks. The chatter was mostly about Europe and the West, and less about the Rest. Gamely, we sloshed about in the snow and endured multiple security checks while commuting between events. And everyone was cheery at the farewell soirée on the “magic mountain”, the setting for Thomas Mann’s eponymous novel.Indeed, the prevailing mood was more upbeat than at anytime since the outbreak of the global financial…
One of the challenges faced by the Obama Administration has been to reconcile existing international organizations with shifts in global power. Growth in emerging markets and the slow resolution of the European debt crisis present different problems but suggest a unique linkage between them. The White House can overhaul global economic governance by supporting the demands of emerging markets for reforms in the IMF, provided that countries work more transparently and collaboratively. This bargain will strengthen the Fund in dealing with European governments and further ensure that it will continue to provide global public goods long into the future.
Wednesday, 06 February 2013 13:52

Groundhog Day Reflections on IMF Reform

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Discussions on IMF quota reform have had a certain recurring pattern to them; to secure IMF quota reform, the zero-sum game of quotas must be embedded in the broader, positive-sum game of preserving the remarkable system of international trade and payments that has been painstakingly erected over the past 70 years.To advance this objective a clear-headed perspective of the role of the IMF in the early decades of the 21st century and the relationship between it and the G20 is required.Start with the IMF. Too much heat, and too little light has been created by debates on what the Fund…
Friday, 09 November 2012 00:00

The IMF Adrift

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The crisis in Europe continues to fester. The weak global economy, distressed banking sectors and the absence of exchange rate policy have impeded resolution. But all of these problems were understood at the outset. The key shortcoming in the strategy for dealing with them was allowing unsustainable national debt burdens — of banks and governments — to sit on the books of the crisis-torn countries. This fundamental strategic error should not have occurred. Ten years ago, the International Monetary Fund (IMF) revised its rules for handling crises, precisely to prevent such errors. But the rules were scrapped, and the IMF…
Thursday, 11 October 2012 00:00

The Case for IMF Quota Reform

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At the G-20 Summit in 2009, global leaders announced that the heads of international financial institutions "should be appointed through an open, transparent, and merit-based selection process." In 2011, however, European leaders failed to honor their promise and insisted on a European to replace Dominique Strauss-Kahn as director of the IMF. In 2012, the Obama administration nominated Jim Yong Kim as its choice to be the new World Bank president. Obama's nomination of Kim essentially ensured his selection, causing exasperation among emerging powers for the United States' failure to consider the Nigerian candidate [Ngozi Okonjo-Iweala], who was widely thought to…
Wednesday, 22 August 2012 00:00

IMF's Re-engagement with Egypt: A New Economic Plan

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Since the overthrow of autocratic leader Hosni Mubarak, investor confidence and economic growth in Egypt has been stymied. To relieve downward pressure on its currecny and cover government expenditures, Egypt has been borrowing from the local market at expensive rates. The country has also depleted its foreign reserves to the point that it can only afford about three months of imports. As a result, Eygpt has seen its bond yields increase to unsustainable levels - around 16 percent. These conditions have led many to assert that an injection of foreign funds is necessary to stabilize Egypt's economy. Since June 2011, the IMF…
News headlines were last week screaming about the US$2 billion pledge that South Africa made to the IMF. Ranging from descriptions of the pledge as a gift or donation to statements that South Africa was bailing out the EU, most of the headlines and the stories fell short on the facts and didn't show much understanding of the economics behind the pledge.Worse still, the fact of the 'pledge' was largely ignored and, from the public debate, one got the definite impression of a South Africa punching above its weight to donate money to save an embattled Europe at the expense…

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