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Verónica Rubio Vega | Post-crisis Responses and Prospects in Latin America
themselves or international financiers. 25 But how has this institution
responded to these criticisms and to the increasing demand for more
flexibility – or even for radical changes – in their prescriptive agendas? There
have been two main developments related to the IMF and its current role in
global governance: the return of the IMF to centre stage and ideological and
internal practical reforms at the institution. Prior to 2007, the majority of
South American economies, benefiting from high commodity prices and
growing currency reserves, had reduced their exposure to the IMF. 26
However, having been pushed to the margins in recent years, a number of
Latin American countries have reconsidered their relationship with the Fund.
For example, the Fund has created a new credit facility, the flexible
credit line (FCL), through which countries with sound fundamentals are able
27
to borrow reserves without having to satisfy onerous conditions. The FCL
can be used both on a precautionary (crisis prevention) and nonprecautionary
(crisis resolution) basis. Potentially more important in terms of
the IMF’s institutional legitimacy, however, is that the IMF consulted
emerging market economies in the process of developing the new FCL. 28
Yet, it remains to be seen whether the FCL can accomplish the goal that
previous credit lines like the Contingent Credit Lines (CCL) could not
achieve. Governments in the region may hesitate to apply to the FLC for the
25 Chin, Gregory T. “Remaking the Architecture: The Emerging Powers, Self-insuring and
Regional Insulation.” International Affairs 86.3 (2010): 693-715. Print. p. 697.
26 Chin 705.
27 For details, see ‘Factsheet: The IMF’s Flexible Credit Line’ (2011)
28 The IMF – Mission: Impossible. Economist.com, The Economist. April 2009. Web. 1 Dec.
2010. line 91.
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