The IMF has played a central role, through its policy guidance and financial support, in helping member countries cope with external debt problems. The IMF’s ultimate objective is to ensure that debtor countries achieve sustainable growth and balance of payments viability and establish normal relations with creditors, including gaining access to international financial markets. The basic elements of the IMF’s debt strategy remain the same, even though the instruments it uses have evolved over time:
One of the main points of contention surrounding globalization is whether the flow of technology, skills, culture, ideas, news, information, entertainment, and people across borders consigns many parts of the world to grinding poverty. On February 18, Jagdish Bhagwati (Professor, Columbia University), in discussing his new book, In Defense of Globalization, took on the skeptics, arguing that, when properly managed, globalization is the most powerful force for social good in the world today. The venue was an IMF Economic Forum moderated by Raghuram Rajan (Economic Counsellor and Director of the IMF’s Research Department) and with commentary by Daniel Yergin (Chair, Cambridge Energy Research Associates and author of The Commanding Heights: The Battle for the World Economy).
ASpecial Session of the United Nations General Assembly met in Geneva on June 26–30 to assess the progress that had been made in the five years since the March 1995 Copenhagen Summit adopted a Declaration on Social Development and Program of Action. In the Copenhagen declaration the heads of state or government of 117 countries had committed themselves to fighting poverty, unemployment, and social disintegration. In the intervening five years, there has been heightened concern over the economic and social consequences of international financial crises, growing insecurity over globalization, and, in some regions, a deepening of poverty and unemployment.
Over the past decade, gross cross-border capital flows have surged, not only among industrial countries but also between industrial and developing countries. What impact has this had on developing countries? A recent IMF study finds that once financial integration crosses a certain threshold, the positive effects of international capital flows can outweigh the negative effects. The authors, Eswar Prasad of the Asia and Pacific Department; Ken Rogoff, the IMF’s Economic Counsellor and Director of the Research Department; Shang-Jin Wei of the Research Department; and Ayhan Kose of the Western Hemisphere Department, spoke to the IMF Survey about their study.