IMF Outlines $750 Million Loan for Georgia
Following a request by the Georgian authorities for IMF financial support, an IMF mission visited Tbilisi in late August and reached agreement on a $750 million financial package.
The 18-month Stand-By Arrangement is intended to support the economic policies of the Georgian authorities and to help mitigate the adverse economic and financial consequences of the recent conflict, said David Owen, head of the IMF mission team that visited Georgia to discuss the financing.
The main objectives of the arrangement are to cover part of the expected temporary external financing gap, and to help sustain the confidence of markets and investors by supporting policies that will ensure continued macroeconomic stability and promote the recovery of private sector investment and economic growth, the IMF said. Georgia’s strong record of reform and sound macroeconomic policies has strengthened the resilience of the economy and bodes well for a solid recovery from this shock.
The IMF Executive Board approved the arrangement on September 15, paving the way for an immediate disbursement of $250 million.
IMF Completes Review of Iraq’s Stand-By Arrangement
The IMF Executive Board completed on September 2 the first review of Iraq’s Stand-By Arrangement, which is designed to support the country’s economic program through March 2009. The $746.3 million arrangement, approved in December 2007, is being treated as precautionary by the authorities, which means they do not expect to draw on it.
“After several very difficult years, economic prospects for Iraq are improving,” said IMF Deputy Managing Director Takatoshi Kato following the Executive Board’s discussion of Iraq’s economic performance. “With the recent improvement in security, oil production and exports are increasing, while inflation has been reduced. The strengthened fiscal and external positions offer Iraq a good opportunity to rebuild its institutions and infrastructure in order to achieve sustained higher economic growth.” Kato added that the success of these endeavors would hinge on continued improvements in security, sound management of oil revenues, and implementation of key structural reforms.
IMF Announces Director Appointments
IMF Managing Director Dominique Strauss-Kahn announced the appointments of three new IMF department directors: Nicolás Eyzaguirre, Western Hemisphere Department; Caroline Atkinson, External Relations Department; and Carlo Cottarelli, Fiscal Affairs Department.
Eyzaguirre, who will take up his post on January 1, 2009, served as Chile’s Finance Minister from 2000 to 2006. Currently Professor of Economics at the University of Chile, Eyzaguirre was the IMF Executive Director for Argentina, Bolivia, Chile, Paraguay, Peru, and Uruguay from 1998 to 2000.
Atkinson and Cottarelli, who are currently on the IMF staff, will assume their new posts on November 1.
IMF Research Conference
The IMF will hold its Ninth Annual Jacques Polak Research Conference on November 13–14 in Washington, D.C. The conference provides a forum for discussing innovative research in economics, by both IMF staff and outside economists, and facilitates the exchange of views among researchers and policymakers. Jean Tirole, Scientific Director of the Institut d’Economie Industrielle in Toulouse, France, will deliver the Mundell-Fleming lecture.
Strauss-Kahn Appoints Governance Reform Panel
IMF Managing Director Dominique Strauss-Kahn announced the appointment of a committee of eminent persons to assess the adequacy of the Fund’s current framework for decision making and advise on any modifications that might enable the institution to fulfill its global mandate more effectively.
The committee, chaired by Trevor Manuel, South Africa’s Minister of Finance, includes: Michel Camdessus, former Managing Director of the IMF; Kenneth Dam, Max Pam Professor at the University of Chicago; Mohamed El-Erian, co-CEO and co-CIO of Pacific Investment Management Co.; Sri Mulyani Indrawati, Minister of Finance of Indonesia; Guillermo Ortiz, Governor of the Bank of Mexico; Robert Rubin, Senior Counselor at Citigroup; and Amartya Sen, Lamont University Professor at Harvard University.
“The committee’s perspective, which I hope to have by next April, will provide yet another important input to our reform efforts,” said Strauss-Kahn, adding that he hoped concrete proposals would emerge from the group’s work by September 2009.