APPENDIX IV IMF Relations with Other International Organizations
- International Monetary Fund
- Published Date:
- September 2001
The IMF increased its efforts during FY2001 to refocus its operations, promote international financial stability, and help its member countries seize the opportunities offered by globalization. Key to this effort was a reassessment of the IMF’s relationship with other international institutions and a clarification of their division of labor. The goal has been to strengthen collaboration through an alignment of policies and improve the effectiveness, and sustain the impact, of their combined operations. These agencies include the World Bank, the United Nations (UN) and its specialized agencies, the World Trade Organization (WTO), the Organization for Economic Cooperation and Development (OECD), the Bank for International Settlements (BIS), regional development banks, and intergovernmental groups.
Regional Representation and Liaison with Intergovernmental Groups
A significant part of the IMF’s relations with international organizations is handled by the IMF’s Office in Europe (Paris), the Office in Geneva, and the Regional Office for Asia and the Pacific (Tokyo).
The Office in Europe interacts with regional and international institutions in Europe and provides support for the IMF’s multilateral and regional surveillance in Europe. Its staff members regularly attend meetings of the OECD in Paris, especially the Economic Policy Committee (EPC), the Economic and Development Review Committee (EDRC), and the Development Assistance Committee (DAC). Both Paris Office staff and Washington-based staff attend meetings of other specialized committees and working groups of the OECD, while the Economic Counsellor customarily attends meetings of the Working Party Three of the EPC. Staff’s interaction with the OECD is intended to ensure a two-way flow of information on economic analysis and policy assessments, for the benefit of both the IMF and the OECD. Paris Office staff also keep in contact with European Union institutions in Brussels and Frankfurt, as well as the Bank for International Settlements in Basel. The Managing Director attended the regular BIS meetings in July 2000, and again in January 2001. Finally, Paris Office staff also participate in the Secretariat of the Group of Ten and coordinate closely with the World Bank’s office in Europe in the IMF’s growing outreach and external communication efforts in Europe.
The Office in Geneva monitors, analyzes, and reports on the activities of Geneva-based socioeconomic agencies, with particular emphasis on the multilateral trading system, along with trade-related developments in the European Union.
These institutions include the WTO, the International Labor Organization (ILO), the UN Conference on Trade and Development (UNCTAD), the UN High Commissioner for Refugees (UNHCR), the UN Office of the High Commissioner for Human Rights (OHCHR), the World Health Organization (WHO), the UN Economic Commission for Europe (ECE), and the Inter-Parliamentary Union.
The IMF’s Office for Asia and the Pacific is responsible for enhancing IMF surveillance of Asian economies and promoting the IMF’s initiatives in the region. The Office works closely with regional groupings, such as the Asia-Pacific Economic Cooperation (APEC) forum, the Association of South East Asian Nations (ASEAN), the South Pacific Forum (FORUM), the Pacific Islands Conference of Leaders (PIC), and the Manila Framework Group. The Office also maintains close contact with the Asian Development Bank (AsDB) and the UN Economic and Social Commission of Asia and the Pacific (ESCAP), as well as with the World Bank’s Office in Japan. It also facilitates the IMF’s participation in the Consultative Group meetings of donor nations held in the Asia and Pacific region.
During FY2001, the IMF continued to take part in the meetings and activities of various intergovernmental groups, including the Group of Seven (G–7), the Group of Ten (G–10), the Group of Twenty (G–20), the Group of Twenty-Four (G–24), and the Financial Stability Forum (FSF). The Managing Director of the IMF attended the second meeting of the G–20, held in Montreal, on October 25, 2000. Attending with the Managing Director, the IMF’s Economic Counsellor offered opening remarks for the session on the world’s economy. On February 17, 2001, the Managing Director met with finance ministers and central bank governors of the G–7 countries in Palermo to review recent economic developments. The President of the World Bank was also present to discuss reform of the international financial institutions, as well as issues related to implementing the enhanced Initiative for Heavily Indebted Poor Countries (HIPC Initiative) and efforts to combat financial abuse, including money laundering.
The Managing Director met with the chairman of the FSF on July 9, 2000, in Basel for an introductory exchange of views on FSF and other related issues. Subsequently, the chairman of the FSF participated as an observer at the IMF’s September 2000 and April 2001 meetings of the International Monetary and Financial Committee and the IMF-World Bank Conference on International Standards. As a member of the FSF, the IMF takes the lead in developing, organizing, and carrying out assessments of offshore financial centers’ adherence to international standards.
Collaboration with the World Bank
The challenges facing the global economy—from preventing and resolving financial crises to addressing the root causes of poverty—require an unprecedented degree of cooperation between the two Bretton Woods institutions. Founded in 1944, the World Bank and the IMF have strong and lasting historic ties. As mandated in their respective Articles of Agreements and in the joint 1989 Concordat, each plays an important, complementary role in ensuring global economic growth and stability. Senior staff of both institutions consult periodically and both institutions participate together on missions, attend joint meetings, and share documents.
This collaboration at the staff level, both in policy advice and on operational matters, is supported by a continuing dialogue between IMF and Bank management. On September 5, 2000, the Managing Director of the IMF and the President of the World Bank issued a joint statement entitled “An Enhanced Partnership for Sustainable Growth and Poverty Reduction.” The statement presents a shared vision and outlines the principles for strengthening cooperation. It clarifies the respective roles of the two institutions, underlining the importance of focusing on core mandates and competencies. One measure of this enhanced partnership was the first joint visit to Africa by the Managing Director and the President in February 2001 (see Box 5.3).
With the goal of expanding information sharing and increasing work program coordination, the Bank-IMF Financial Sector Liaison Committee (FSLC), created in 1998, has formulated guidelines for collaboration between the Bank and the IMF in financial sector work. One initiative of the committee, the Financial Sector Assessment Program (FSAP), launched as a pilot project in May 1999 and renewed in FY2001 (see Chapter 3), seeks to provide better coverage and analysis of member countries1 financial systems through closer Bank-IMF collaboration. The IMF and Bank also collaborate on a related initiative, which promotes the use of international standards and codes and undertakes assessments of members1 observance of certain standards; the IMF takes the lead in some areas and the Bank in others.
The Bank and IMF also collaborate in the areas of growth, poverty reduction, and debt relief. The Joint Implementation Committee (JIC), formed at the beginning of FY2001, coordinates work on two high-priority joint Bank-IMF initiatives, the enhanced HIPC Initiative and the Poverty Reduction Strategy Paper (PRSP) process. (For more on Bank-Fund collaboration in this area, see Chapter 5.)
Bank and IMF staff have carried out a series of related exercises to facilitate the implementation of the new approach. For example, at the end of FY2001, they were engaged in detailed assessments of the performance of public expenditure management systems in 25 HI PCs to identify strengths and weaknessess of those systems, with a view to developing action plans to strengthen such capacity. The Joint Implementation Committee has also established a Working Group on social impact analysis in countries participating in the PRSP process. The group is developing a work program to take stock of existing social impact analysis programs in a sample of countries participating in the PRSP process and to launch a number of pilot programs during the remainder of the calendar year. Bank and IMF staff have also collaborated on the need to streamline conditionality by focusing on a few key measures that are central to the success of a country’s strategy and by limiting conditionality of Bank and IMF-supported programs to those areas in which each institution has particular expertise and competence.
To improve risk management and governance in the public sector and help governments reduce their external vulnerability, the Bank and the IMF have prepared and released a set of Guidelines for Public Debt Management. Other issues of common concern include efforts to combat money laundering, provide help to postconflict countries, and achieve International Development Goals.
Relations with the United Nations
The IMF continued close collaboration with the United Nations during FY2001, through the IMF Special Representative to the UN and through other extensive institutional contacts. The mandate of the Special Representative, operating out of the Office at the United Nations in New York, is to foster communications and cooperation between the IMF and the UN. The most prominent functions of the UN Office include making the IMF’s views known, providing input for the deliberations at the UN on IMF-related issues, keeping the IMF informed of major developments within the UN systern, and facilitating cooperation between the institutions.
A Special Session of the UN General Assembly was held in Geneva June 26–29, 2000, to review the implementation of the outcome of the World Summit for Social Development in Copenhagen (1995) and to consider the further initiatives. IMF staff attended the Special Session and contributed to the UN Follow-Up Report on the Social Summit. The UN Secretary General also took the opportunity of the Special Session to launch the report, A Better World for All, co-authored by the IMF, OFCD, UN, and World Bank.
During the regular session of the Economic and Social Council (FCOSOC), a Deputy Managing Director participated in the High-Level segment held at UN headquarters on July 5–7, 2000. The meeting allowed an exchange of views on current issues facing the global economy and provided a forum for promoting the positive influence of information and communication technologies on development.
Subsequently, as noted in the report of the IMF Special Representative on the 2000 session of the UN General Assembly (held in New York from September 5 to December 23, 2000), the Assembly encouraged a deepened dialogue between KCOSOC and the Bretton Woods institutions, including through a High-Level Meeting between the ECOSOC, the IMF, and the World Bank after the 2001 spring meetings of the IMFC and the Development Committee.
In March 2002, a conference on Financing for Development will be held in Mexico. The IMF accepted the UN’s invitation to become involved in preparations for the event. During FY2001, it contributed to the preparatory work on several levels, including through the involvement of the IMF’s management, staff, and the Executive Board (for more details, see Box 5.1).
Relations with the World Trade Organization
Collaboration between the IMF and World Trade Organization takes place formally as well as informally, as outlined in their Cooperation Agreement, signed in December 1996. Under the Agreement, the IMF has observer status in WTO meetings, regularly attends formal meetings of most WTO bodies, and engages in the consultations of the Committee on Balance of Payments Restrictions. During FY2001, the Managing Director of the IMF met with the Director-General of the WTO on several occasions. They discussed cooperation in launching a new round of trade negotiations and improving coordination of agencies’ policy advice and technical assistance. They also discussed the HIPC Initiative and examined the need to improve market access for exports of least-developed countries (LDCs). Additionally, the WTO Secretariat and the IMF staff are in frequent contact to avoid any inconsistency in policy advice.
The IMF is working with other core agencies to improve the effectiveness of the Integrated Framework for Trade-Related Technical Assistance for Least-Developed Countries. The Integrated Framework is a cooperative interagency initiative designed to strengthened the overall capacity of these countries to respond to the challenges and opportunities offered by the world trading system. In 2001, a donor-supported pilot scheme was initiated to assist several least-developed countries to main stream trade into their development strategies within the context of the PRSP process.
In January 2001, both IMF and World Bank staff took part in an informal WTO General Council meeting. Examining the interaction between trade and the structural, macroeconomic, financial, and development aspects of economic policymaking, the General Council reviewed the WTO’s institutional cooperation with the IMF and the Bank to ensure consistency of and mutual support for policies.
Cooperation with Regional Development Banks
Whether working to prevent a crisis, reduce poverty, or strengthen the global financial system, the IMF cooperates closely with the world’s multilateral and regional developments banks. This collaboration includes formulation and implementation of policies in the economic and financial areas, release of information, and exchange of staff visits. The IMF and multilateral development banks have also established several technical-level working groups to enhance collaboration, build coherence, and harmonize policies and procedures. These groups address issues such as financial sector reform, financial management, governance and corruption, poverty reduction, and gender issues.
The IMF also collaborates with the regional development banks individually. In FY2001, the IMF worked with the Asian Development Bank to strengthen Fast Asian financial cooperation, with the European Bank for Reconstruction and Development (EBRD) to stabilize the economic situation in South-Elastern Europe, with the Inter-American Development Bank (IDB) to address the crisis in Argentina, and with the African Development Bank (AfDB) to arrange meetings with African Heads of State in Bamako and Dar es Salaam. In addition, IMF staff regularly attend meetings, seminars, and forums sponsored by other regional, economic, and financial organizations throughout the world. Representatives of multilateral creditors are invited to attend country-specific IMF Board discussions of HIPC matters. Enhancements to the PRGF-HIPC programs, instituted in FY2000, strengthen the link between debt relief and poverty reduction and point to the need for continuing cooperation.
At the request of the Group of Eight (G-8), in August 2000 the IMF, World Bank, and regional development banks co-authored a report for the G-8 Okinawa Summit entitled the Global Poverty Report 2000. The group is working on Global Poverty Report 2001 as a follow-up to this exercise.
Role of IMF Management
As the rapid pace of globalization continues, issues affecting the strengthening of the world’s financial system require increasing attention from IMF management, and close cooperation among the international financial institutions has become more important. IMF management plays a key role in promoting collaboration among financial, trade, and development organizations.
On May 30, 2000, the Managing Director addressed the International Monetary Conference in Paris where he spoke to leaders of the private financial sector on the future role of the IMF—outlining this vision of a more focused IMF. At the National Press Club in Washington on August 7, 2000, he expanded on his vision for the IMF in a changing world. The Managing Director spoke at the Africa Forum 2000, hosted by the Bank-IMF Africa Club, in Washington on October 30, 2000, about the importance of promoting private sector involvement and development in Africa. On November 6, 2000, he attended the Conference on “Completing Transition: The Main Challenges,” organized by the Austrian National Bank, in Vienna, where he spoke of the continuing challenge of transition and convergence 10 years after the fall of communism. At a meeting with European Union Parliamentary Committees in Brussels on November 7, 2000, the Managing Director reviewed the ongoing process of reform within the international monetary system. In Kobe, for the Asia-Europe Meeting (ASEM) of Finance Ministers, he offered his perspective on the challenges that a globalized financial system poses for exchange rate policy. The Managing Director, together with the President of the World Bank, attended meetings of the African Heads of State in Bamako, Mali, and Dar es Salaam, Tanzania, from February 18–25, 2001, where he focused on the major issues confronting Africa today. At the Conference on Child Poverty, Education, and Health in London on February 26, 2001, the Managing Director welcomed a commitment to breaking the cycle of world poverty. On March 7, 2001, at the Bank-IMF Conference on International Standards and Codes in Washington, the Managing Director emphasized that standards and codes are an important tool for achieving sustained growth and financial stability. In a meeting with members of the Deutsche Bundestag in Berlin on April 2, 2001, he addressed the challenges of globalization and highlighted the role of the IMF in promoting macroeconomic stability through crisis prevention and poverty reduction.
Among the many conferences, meetings, and seminars attended by the IMF’s Deputy Managing Directors were the above-mentioned High-Level Meeting of the ECOSOC in New York on July 5, 2000; the APEC Finance Ministers’ Meeting in Brunei Darussalam from September 7–10, 2000; and the Latin American and Caribbean Economic Association (LACEA) 2000 Conference in Rio de Janeiro on October 12, 2000.