One of the core responsibilities of the International Monetary Fund is to maintain a dialogue with its member countries on the national and international consequences of their economic and financial policies. This process of monitoring and consultation, referred to as surveillance, is mandated under Article IV of the IMF’s Articles of Agreement and lies at the heart of the Fund’s efforts to prevent crises.
The growing integration of the world economy in recent decades has brought substantial benefits to the IMF’s member countries. But this economic interdependence has also created new challenges, as demonstrated by the financial crises of the 1980s and 1990s. The IMF has responded to these challenges, in part, by strengthening its framework for, and enhancing the content of, surveillance—its foremost means of helping countries avert crises. Surveillance allows the Fund, working with its member countries, to identify economic and financial policy strengths and weaknesses and vulnerabilities that could lead to crises and to formulate policy actions that can safeguard stability. And, given the potential for national crises to spill over to other countries in today’s global economy, surveillance is a means for the Fund to fulfill its mandate of promoting international economic and financial stability.
Providing financial support under adequate safeguards to member countries with balance of payments difficulties is one of the IMF’s main responsibilities. In a time of increasing and volatile capital flows, the Fund continues to seek better ways of bolstering members’ efforts to adjust to adverse circumstances, restore a viable balance of payments, implement reforms, and strengthen growth.
The IMF’s goal in low-income countries is to help them achieve deep and lasting poverty reduction through policies that promote growth, generate employment, and target assistance to the poor. This aim is consistent with the IMF’s mandate to “contribute … to the promotion and maintenance of high levels of employment and real income and to the development of the productive resources of all members as primary objectives of economic policy.”1 The Fund pursues this goal in close collaboration with other development partners—particularly the World Bank. In doing so, the IMF focuses on its core areas of responsibility and expertise, namely, helping member countries achieve stable macroeconomic conditions by providing them with policy advice supported by financial and technical assistance.