Questions in the News
Responses to Questions About IMF Policies and Country Operations
Criticism of the IMF
Last Updated: May 10, 2007| Question: Has a country ever before pulled out of the Fund? What would the implications be of such a move? Would that have to mean a certain massive adjustment or a small adjustment in any way for resources or quotas or anything like that? |
| Answer:
MR. AHMED: There have been instances of countries that in the past—going back many, many years now—have left the Fund. The consequences of that have varied depending on the relationship the country had at that time with the Fund in a bilateral sense. So I think there is no general rule in terms of the consequences.
May 10, 2007 Transcript of a Press Briefing by Masood Ahmed, Director of the External Relations Department, IMF |
| Question: How often is the IMF right in its projections? Do you assess your accuracy? |
| Answer:
MR. CALLEN: We do assess our accuracy. What we have done typically is every five years we employ an academic economist, an expert in economic forecasting to come in and look at the forecast performance of the WEO. The last assessment was published in early last year, done by Prof. Allan Timmermann of UC-San Diego. Of course, it depends on how you assess accuracy. We can certainly not claim to be spot-on every actual number, but I think that the review Prof. Timmermann did suggest that we were certainly in line with the accuracy of the private consensus forecasts, which we take to be a good sign given that statistically an average of many forecasters is very difficult to beat. We think that is positive. Clearly, there are times when we are too optimistic about the global economy and times when we're too pessimistic, and I think over the last couple of years we have actually been erring on the side of being too pessimistic, that we have seen global growth coming in above what we expected in the WEO. Assigning a grade to our forecasts is for others to do. If you look at Fig. 1.10 on page 13 of the WEO report, you see the line is our central forecasts, and that is the numbers we talked about. But we show you the error band around this. We're quite honest about this. That error band is based on historically what our error has been in terms of forecasting. And then we adjust the band in terms of what we talk about in the report. We are trying to be quite transparent on what our forecast errors have been in the past. I think that the report has considerable analytic content in addition to providing the numbers, and we think that, because of the 185 members of the IMF, we have unique insights into what is going on around the world, in both big economies and small economies, so we have a multilateral perspective on growth, and our mandate is very much not to come out and tell you that things are good when things are bad, it is actually to come out and tell you honestly what is happening with the global economy, honestly how that is going to affect countries, how that is going to help them and how it is going to hurt them. That is what we're trying to do. If we do that right, we're doing our job. April 11, 2007 Transcript of the World Economic Outlook Press Conference |
| Question: There has been talk that the IMF is the wrong institution in the wrong place at the wrong time in Africa and in most developing economies. What is your comment on that, and what do you expect to do to change the situation? |
| Answer:
I think our work in low-income countries in general and Africa in particular, is very intense. In comparison to other areas of the world, we devote to Africa the biggest contribution of human resources and programs. I think we are engaged in very detailed poverty reduction programs that are based on home-grown proposals by governments and societies of those countries. Certainly, the efforts by the institution in debt relief have been substantial. I want to remind you that a very substantial part of that effort is going to Africa. As I said yesterday or the day before here, the package of reforms that are put forward here makes a significant change in the governance of this institution by recognizing that, together with economic weight, regardless of how you measure economic weight, the voice of low-income countries has to be enhanced in this institution. I think that is an historical change in the way the countries perceive the governance of the IMF. Even on other issues there are different views. On the issue regarding the need to protect low-income countries' votes, I think there is almost unanimity. So, in that respect, I think the institution is becoming more and more aware of the need to reflect the situation of low-income countries, and I think the combination of instruments that we have put forward in recent years regarding poverty reduction and involvement in low-income countries is very important. I am very happy to stress once again that in capacity-building, for instance, certainly Africa is the area in which we are making bigger efforts. I think your question omits the fact that when the International Monetary Fund was set up alongside the World Bank in the 1940s, the objective was not simply to provide for stability and growth, which is, of course, essential, but to show that growth, to be sustained, had to be shared across the world. I think what we are doing in new circumstances is trying to revive and enhance that objective of the International Monetary Fund, with its responsibilities to all continents of the world. I think the work that is being done on transparency, on codes and standards, on fiscal policy, monetary policy, corporate standards, will, in my view, be of great assistance to the very countries that you are talking about, and that is combined with the work that has been done in the last year on removing the burden of debt from many of the low-income countries in Africa and elsewhere. So, we are making the IMF fit for a purpose for a world in which we recognize the greater interdependence of countries and, therefore, new rules, new systems, new reforms, and new structures of government are going to be necessary. But in my view, the working out of these reforms are going to be of great benefit to developing countries. September 17, 2006 Press Briefing by Rodrigo de Rato, IMF Managing Director, and Gordon Brown, Chairman of the International Monetary and Financial Committee |
| Question: The Brazilian Finance Minister yesterday said that the Fund is in the process of sclerosis. He used this word to characterize the way the Fund is taking the process of quota reforms in light of the fact that Brazil and other countries have different views on the reform process. Do you think that this reform can lead to a loss of representativeness of the Fund, not with respect to quotas, but rather in the way that members express themselves during this reform? |
| Answer:
As you know, the reform required if at least 85 percent of the voting power. Eighty-five percent is a very substantial position in any institution. At the same time, I understand perfectly that there are different analyses. But the Minister from Brazil, Mr. Mantega, agrees with the ad hoc increase for four countries. He agrees with the need to enhance and ring-fence voting power for low-income countries. He agrees on the importance of the quota reform. He has some very understandable positions regarding how the quotas should be defined, which positions may coincide with others or not with everybody, and I think that is going to be the question of discussion. I want to thank Minister Mantega for his words this morning at the IMFC in which he clearly said that, as the discussions will evolve upon the vote of tomorrow, of course, he will be very willing to change his position if his actual views are satisfied. Some people say we have been moving too fast and some people say we have been moving too slowly. I suppose sclerosis means you are not moving at all. The one thing you cannot say is that there is no change. Change is happening. Reforms have been put in place. The purpose of the IMF is changing. It is about crisis prevention as much as crisis resolution. The vehicle it is using—multilateral surveillance, which is absolutely central to the work of the IMF—is changing. The structure of governance is changing. I think when people look back on the history of the International Monetary Fund, they will say that the biggest reforms in 60 years are being brought in now and we are at the start of a process of change that will continue over the next few years. September 17, 2006 Press Briefing by Rodrigo de Rato, IMF Managing Director, and Gordon Brown, Chairman of the International Monetary and Financial Committee |
| Question: I would like to have your assessments on the fact that Brazil and other countries are complaining about the way the IMF intends to conduct their quota reform. |
| Answer:
I believe it is not only in the specific interest of Brazil but in the interest of all of Latin America, to make the Fund more responsive to emerging economies and low-income countries. I don't have any doubt about that.
And my very frequent interchanges of views with Latin American representatives and members of governments, and Brazilian ones in particular, make me believe that this is a shared view. I think that we are moving toward giving more dynamic economies a more important role to play in the institution, and many of those more dynamic economies are emerging economies.
September 15, 2006 Press Briefing by Rodrigo de Rato, Managing Director, IMF |
| Question: Part of the IMF's image problem in Asia some time back has already been addressed, but as a follow-up, do you think the Asian countries now that they are in a phase of dynamic process of economic growth, do you think the Asian countries will revive the idea of an Asian regional monetary Fund and if so what would be the IMF's response? |
| Answer:
The clear success of Asia in the last ten years shows us, in my opinion, that Asia will become more involved in international economy not less involved. In that respect, the role of international institutions like the IMF can be extremely helpful. In fact, we have already helped Asian countries in many ways regarding financial integration, which we believe is a very important instrument for Asia to become more integrated in the global economy and at the same time take advantage of its own important assets. Greater integration in trade terms, in investment terms, and in financial terms is both an inevitable and potentially very positive influence in the region, but at the same time is in no way counter to greater integration in the global economy. So how these steps will unfold will be, to a significant degree, a choice of the Asian economies. We look forward to partnering with the countries in the region in this effort in many ways.
September 15, 2006 Press Briefing by IMF Managing Director, Rodrigo de Rato, and Deputy Managing Director, John Lipsky |
| Question: Mr. de Rato, after 13 months as IMF Managing Director, you are being criticized for being away from IMF headquarters too much, and not doing enough to make the Fund relevant to today's world. How do you respond?. |
| Answer:
Some people believe that the Fund is only relevant if it can force people. Those same people believe we should be sending messages from Washington so that everybody will follow our advice. Well, I think they live in another world and certainly in a world I don't want to be in. I believe my job requires first-hand information available only at the source. The world in which somebody from Washington could tell governments things from IMF headquarters is long gone and in my opinion well gone. If you want to say something about a country and you want to be credible you have to say it in the country. Rodrigo de Rato, Managing Director, IMF: Based on excerpts from interview with Reuters "Under fire, IMF's Rato wants to get the job done". July 29, 2005 |
| Criticism of the IMF : archived questions and answers |