Appendix III. Relations with Other International Organizations
- International Monetary Fund
- Published Date:
- October 1997
Recognizing the importance of a collaborative approach to addressing the opportunities and challenges of a globalized economy, the Fund continued during 1996/97 to strengthen its cooperation with international and regional economic organizations. The year was marked by a number of significant developments in this area of cooperation. These included the signature of a Cooperation Agreement between the Fund and the World Trade Organization (WTO); steps to increase cooperation with the International Labor Organization (ILO); and strengthened collaboration between the Fund and the World Bank, particularly in the Initiative to assist the Heavily Indebted Poor Countries (HIPCs), on issues relating to sound banking principles and policies, and on other financial sector problems. During the year, working relations were also strengthened with the United Nations and its specialized agencies, the Organization for Economic Cooperation and Development (OECD), the European Commission, and the Bank for International Settlements (BIS), Effective January 1, 1997, the Fund established the Regional Office for Asia and the Pacific—which will be located in Tokyo and will begin operations in the fall of 1997—to develop closer ties with policymakers and to more closely monitor economic and financial developments in the region.
On November 25, 1996, the Executive Board adopted a decision approving the proposed Fund-WTO Cooperation Agreement. The agreement was signed by the heads of both organizations on December 9, 1996 during the first Ministerial Conference of the WTO, which was held in Singapore, Cooperation includes exchange of information and databases, access to certain documents, and attendance by each organization at meetings on issues of common interest. Along with this agreement, the Board of Governors adopted on January 8, 1997 a proposed amendment to the Fund’s By-Laws granting the WTO observer status at the Annual Meetings of the Board of Governors. The agreement between the Fund and the WTO also lays the basis for achieving greater coherence in global policymaking. The Fund’s continuing participation in consultations of the WTO Committee on Balance of Payments Restrictions, under existing procedures, underscores the importance accorded to greater institutional cooperation.
In October 1995, the Interim Committee called for the Fund’s cooperation with the ILO to be strengthened. In addition to closer contacts between the ILO and the Fund’s Geneva office. Fund staff—in particular, resident representatives—have been encouraged to provide ILO staff their views on a country’s macroeconomic policies and targets. This ensures that the ILO’s advice on employment and social development is consistent with a sustainable macroeconomic framework. At the same time, Fund staff may seek ILO views on labor market issues and the design of cost-effective social protection instruments. In addition to the general Fund-ILO cooperation at the country level, in 1996 several countries were selected as pilot cases for enhanced collaboration between the two institutions.
Rapid developments in different aspects of the global economy led to the further strengthening of collaboration between the Fund and the World Bank. Both institutions continued the regular exchange of information and documents, joint participation in missions, and attendance at each other’s Executive Board meetings and seminars; Fund staff also attended, on a regular basis, aid coordination meetings and donors’ conferences sponsored by the Bank, During the financial year, the Fund intensified its collaboration with the Bank, especially on the procedures and implementation of the HIPC Initiative (see Chapter 7); on issues relating to sound banking principles and practices, capital account liberalization, and good governance (see Chapter 4, the section “Evolving Issues in Fund Surveillance”); and on other policy issues.
—One of the guiding principles of the HIPC Initiative is that assistance to eligible countries would be coordinated among all of its creditors, with broad and equitable participation. Prior to the “decision point,” Fund and World Bank staff initiate the consultation process with other creditors to seek their views on the actions necessary to achieve debt sustainability. The extensive consultation process among creditors is aimed to ensure that the final HIPC document and decisions of the Fund and Bank Boards reflect the likely response of the international community. Immediately following the Fund and World Bank Board meetings at the decision point, a joint letter is sent by the Managing Director and the President of the World Bank to multilateral and bilateral creditors, informing them of the decisions in principle by the Fund and Bank, and seeking assurances of action consistent with these decisions. On this basis. Fund and Bank commitments of assistance would be confirmed.
—On banking soundness, it was agreed that, while the Fund should focus on the macroeconomic implications of stable and sound financial systems, the Fund would need to collaborate closely with other international organizations and groups, including the World Bank and the Basle Committee on Banking Supervision. With respect to systemic bank restructuring, the World Bank and other multilateral organizations should take the lead in the microeconomic and operational aspects of bank restructuring.
—As the Fund’s role in promoting capital account liberalization and fostering smooth operation of international capital markets evolves, including through appropriate amendment of its Articles, in April 1997 discussions the Executive Board noted the importance of ensuring adequate coordination with other international organizations working with international financial issues, such as the OECD and the WTO, as well as the World Bank.
—Similarly, as the Fund’s role in issues of good governance develops, the Board in January 1997 recognized that clarification of this role would entail enhanced collaboration with other multilateral institutions, especially the World Bank, and with bilateral donors and official creditors.
—The Fund and the Bank also enhanced their collaboration on other policy issues in the joint preparation of papers concerning debt strategy, external financing, and developmental policies. The formal dialogue between Bank and Fund staff on public expenditure issues, which was begun in 1995, improved the coordination between the two institutions. In particular, the 1996/97 round of discussions enabled a larger incorporation of Bank staff’s views on public expenditure priorities into Fund-supported programs.
Offices Outside Washington
The primary function of the new Regional Office for Asia and the Pacific and other offices of the Fund located away from headquarters is to maintain liaison and promote a collaborative relationship with other international and regional institutions. Developments and activities of the United Nations and its specialized agencies are monitored and analyzed at UN headquarters in New York by the Director of the Fund Office at the UN and Special Representative to the UN. The Office in Europe, which is located in Paris, liaises with and reports on activities of Europe-based international and regional institutions, including the BIS, the European Commission, and the OECD. The Paris office also provides continuing support to the work of the Group of Ten. The monitoring, reporting, and analyzing of the activities of institutions such as the WTO, the UN Conference on Trade and Development (UNCTAD), and other Geneva-based agencies are provided by the Fund’s Office in Geneva. One of the activities of the Geneva office involves strengthening relations with the ILO, which includes an ongoing discussion on employment and structural adjustment, social dimensions of adjustment, and other areas of direct interest to the Fund.
Some of the collaborative activities with international and regional institutions of the Fund’s offices located away from headquarters include attendance at meetings, participation in seminars and expert groups, and the exchange of information and documents. The offices also maintain operational linkages with Fund management and various technical experts from headquarters.
Cooperation with Regional Development Banks
An essential factor in collaboration with other organizations is promoting regional economic development in the new globalized economy. Cognizant of the important role played by multilateral development banks, the Fund continued its close cooperation with the various regional development banks such as the African Development Bank (AfDB), the Asian Development Bank (ADB), the European Bank for Reconstruction and Development (EBRD), and the Inter-American Development Bank (IDB). The Fund’s collaboration with the multilateral development banks included consultations, release of information, staff visits, and attendance at meetings. Other regional, economic, and financial organizations in Africa, Asia and the Pacific, Latin America and the Caribbean, and the Middle East also sponsor meetings, seminars, and forums that are regularly attended by Fund staff.
Joint Vienna Institute
The Fund continued its active participation in activities and training of the Joint Vienna Institute (see the chapter on Technical Assistance and Training), The Joint Vienna Institute, a cooperative venture of its sponsoring organizations—the BIS, the EBRD, the Fund, the World Bank, and the OECD—provides training to officials and other representatives from former centrally planned economies in transition to market-based systems The Institute, during its five years of service, has provided over 20,000 participant-weeks of training to some 6,000 participants in Vienna and at its centers in Prague, Kiev, Moscow, and Tashkent.
Role of Fund Management
The Managing Director continued to play a central role in sustaining close relations with other international organizations through attendance at conferences, meetings, and seminars sponsored by the UN, BIS, WTO, and other organizations. On September 28, 1996 he addressed the IDB at the Conference on Safe and Sound Financial Systems: What Works for Latin America. In October 1996 he attended a session of the UN Administrative Committee for Coordination (ACC) in New York. On December 9, 1996 the Managing Director delivered a speech at the first Ministerial Conference of the WT0 in Singapore and, as mentioned above, signed the Fund-WTO Cooperation Agreement. In April 1997 he met with the UN Secretary-General and Heads of Specialized Agencies at the ACC session in Geneva, where he also had consultations with UNCTAD and the WTO.