What Is the International Monetary Fund? - the JVI eCampus!

More documents

Recommendations

Info

Technical Assistance and Training - 18 - The IMF is probably best known for its policy advice and its policy-based lending to countries in times of economic crisis. But the IMF also shares its expertise with member countries on a regular basis by providing technical assistance and training in a wide range of areas, such as central banking, monetary and exchange rate policy, tax policy and administration, and official statistics. The objective is to help strengthen the design and implementation of members' economic policies, including by strengthening skills in the institutions responsible, such as finance ministries and central banks. Technical assistance complements the IMF's policy advice and financial assistance to member countries and accounts for some 20 percent of the IMF's administrative costs. The IMF began providing technical assistance in the mid-1960s when many newly independent countries sought help in setting up their central banks and finance ministries. Another surge in technical assistance occurred in the early 1990s, when countries in central and eastern Europe and the former Soviet Union began their shift from centrally planned to market-based economic systems. More recently, the IMF has stepped up its provision of technical assistance as part of the effort to strengthen the architecture of the international financial system. Specifically, it has been helping countries bolster their financial systems, improve the collection and dissemination of economic and financial data, strengthen their tax and legal systems, and improve banking regulation and supervision. It has also given considerable operational advice to countries that have had to reestablish government institutions following severe civil unrest or war. The IMF provides technical assistance and training mainly in four areas: • strengthening monetary and financial sectors through advice on banking system regulation, supervision, and restructuring, foreign exchange management and operations, clearing and settlement systems for payments, and the structure and development of central banks; • supporting strong fiscal policies and management through advice on tax and customs policies and administration, budget formulation, expenditure management, design of social safety nets, and the management of internal and external debt; • compiling, managing, and disseminating statistical data and improving data quality; and • drafting and reviewing economic and financial legislation. The IMF offers training courses for government and central bank officials of member countries at its headquarters in Washington and at regional training centers in Brasília, Singapore, Tunis, and Vienna. In the field, it provides technical assistance through visits by IMF staff, supplemented by hired consultants and experts. Supplementary financing for IMF technical assistance and training is provided by the national governments of such countries as Japan and Switzerland, and international agencies such as the European Union, the Organization for Economic Cooperation and Development, the United Nations Development Program, and the World Bank.
- 19 - Strengthening the International Monetary and Financial System Globalization has created new challenges for the IMF. Two of the most important, and most difficult, are how to strengthen the global financial system—so that it becomes less prone to financial crises and more able to cope with crises when they occur—and how to advance the fight against poverty in low-income countries (see next chapter). Globalization has yielded great benefits for many countries and people around the world. Integration into the world economy is an essential part of any strategy to enable countries to achieve higher living standards. But globalization, by increasing the volume and speed of international capital flows, has also increased the risk of financial crises. And at the same time, the risk has arisen that low-income countries, which have not yet benefited substantially from globalization, will fall further behind as living standards rise elsewhere. Building A Stronger Global Financial System The financial crises in emerging markets in the mid- and late 1990s were a reminder of the risks associated with globalization -even for economies that have benefited immensely from the process and that, in many respects, are well managed. The economies hit in the 1997-98 Asian crisis, in particular, had gained enormously over several decades from international trade, foreign direct investment, and access to increasingly integrated international financial markets. The crises exposed not only policy weaknesses in the crisis countries themselves, but also flaws in the international financial system, driving home two facts of life: • Investors may retreat quickly and massively if they sense shortcomings in domestic economic policies. Once investors-domestic or foreign-lose confidence, capital inflows can dry up, and large net outflows can precipitate a financial crisis. • A crisis in one country or region can rapidly spill over into other economies.
Page 1 and 2: What Is the International Monetary
Page 3 and 4: - 3 - In October 2000, the IMF appr
Page 5 and 6: - 5 - restrictions on their citizen
Page 7 and 8: - 7 - At the same time as the IMF w
Page 9 and 10: What Is an SDR? - 9 - Box 3 The SDR
Page 11 and 12: - 11 - framework of a comprehensive
Page 13 and 14: - 13 - national support for the pro
Page 15 and 16: - 15 - • reaffirm the Extended Fu
Page 17: structural weaknesses in their econ
Page 21 and 22: - 21 - Complementing the work of th
Page 23 and 24: Collaborating with other institutio
Page 25 and 26: - 25 - with an analysis of the stra

What Is the International Monetary Fund? - the JVI eCampus!

You also want an ePaper? Increase the reach of your titles

Delete template?

Save as template?