The hallmarks of the IMF, as reflected in the policy implementation showcased in this time line, are twofold: its universality and the responsibility it bears to interact cooperatively with each of its members on economic policies; and its flexibility, its ability to adapt its activities rapidly to the demands of a continually evolving global economy. It is a perennially “self-reforming” institution, mindful of its obligation to its entire membership.
In recent years, this has meant facing three major challenges: the gathering pace—and expanding opportunities and risks—of globalization; the transition from planned to market economies in many countries; and an intensified response to the plight of the world’s poorest countries.
In the future, the world is expected to confront a deepening integration of markets, but it will need to address additional challenges, such as the aging of populations, and the potential for a surge in extremism and violence if the trend toward greater inequalities between the poorest and most affluent countries is not reversed.
What happened at the IMF…
Bebi Heybat mosque and bay in Baku, Azerbaijan.
Facilities temporarily expanded to support countries affected by Middle East crisis
Interim Committee agrees to a 50 percent quota increase
Completion of joint study (IMF, World Bank, Organization for Economic Cooperation and Development, and European Bank for Reconstruction and Development) on the Soviet economy, with recommendations for reform
Former USSR countries receive technical assistance
Quota increase takes effect
Executive Board approves membership of former USSR countries
Third Amendment to the Articles of Agreement permits members with arrears to establish record on policies and payments performance and accumulate rights for future drawings
Executive Board increased from 22 to 24 seats
Systemic Transformation Facility (STF) created to assist countries in transition from a planned to a market economy
Madrid Declaration calls on industrial countries to sustain growth, reduce unemployment, and prevent a resurgence of inflation; developing countries to extend growth; and transition countries to pursue bold stabilization and reform efforts
New era of transparency initiated
Arrangements approved for 13 countries of the CFA franc zone
Stand-By Arrangement of SDR 12.1 billion (about $17.8 billion) approved for Mexico
Many of the world’s poor live in Africa.
Extended Fund Facility (EFF) Arrangement of SDR 6.9 billion (about $10.1 billion) approved for Russia
IMF establishes data standards for member countries
Approval of Heavily Indebted Poor Countries (HIPC) Initiative and permanent financing for the Enhanced Structural Adjustment Facility (ESAF)
Website established as part of transparency effort [http://www.imf.org]
Public information notices (PINs) issued following IMF consultation with countries are published if country agrees
Board of Governors approves Fourth Amendment, calling for special allocation of SDRs
Creation of Supplemental Reserve Facility (SRF)
Establishment of New Arrangements to Borrow (NAB)
Activation of SRF and NAB and Approval of Stand-By Arrangement of SDR 5.5 billion for Korea
General Arrangements to Borrow (GAB) activated for Russia
NAB activated for Brazil
To address far-reaching problems facing world economy, Board of Governors endorses concept of new “financial architecture”
Newly established European Central Bank granted observer status in IMF
Quotas increased by 45 percent
Contingent Credit Lines Facility established to protect countries with sound policies from crises in other countries
Revaluation of gold holdings to help finance ESAF-HIPC Trust
ESAF replaced by Poverty Reduction and Growth Facility
HIPC Initiative is enhanced to provide faster and broader debt relief
Interim Committee transformed into the International Monetary and Financial Committee
Major push for HIPC-eligible countries to reach decision points
Steps taken to monitor more closely the use of its resources by borrowing countries
Independent Evaluation Office established to assess operations and policies
Financing facilities streamlined
International Capital Markets Department established to enhance surveillance, crisis prevention, and crisis management
Conditionality streamlined; country ownership of reforms stressed
China’s quota increased to SDR 6.4 billion (about $8.3 billion)
First Deputy Managing Director proposes mechanism to help sovereign debtors and their creditors resolve debt problems
Focus on Millennium Development Goals intensified
$30 billion StandBy Arrangement with Brazil approved
Stock market operators negotiate trades in São Paulo, Brazil, during currency crisis..
|…and in the world|
|• Middle East crisis|
• Two Germanys (and currencies) unify
• Establishment of European Bank for Reconstruction and Development
|• Dissolution of Soviet Union and Yugoslavia|
• Maastricht Treaty creates European Union
• Establishment of MERCOSUR (common market for Argentina, Brazil, Paraguay, and Uruguay)
|• Japan enters deep economic slump|
• North American Free Trade Agreement signed
• European Exchange Rate Mechanism (ERM) crisis
|• Radical reform of the ERM||• Debt crisis in Mexico|
• World Trade Organization replaces General Agreement on Tariffs and Trade
• Devaluation of CFA franc
|• Latin American financial markets feel contagion effects of Mexican crisis|
• Uruguay Round trade agreement concluded
|• Problems of some heavily indebted poor countries worsen||• China resumes sovereignty over Hong Kong|
• Thai baht collapses; contagion affects Korea and Southeast Asia
|• Asian crisis spreads, reaching as far as Brazil and Russia|
• Collapse of Long Term Capital Management hedge fund
• World’s first regional stock exchange launched in Abidjan, linking 8 West African countries
|• Launch of euro—single European currency—in 11 countries||• Meltzer Commission Report on role and effectiveness of IMF and multilateral development banks|
• Jubilee 2000 calls for total debt cancellation
• African leaders hold economic summit to discuss poverty and growth
|• U.S. recession begins|
• Terrorists attack United States on 9/11
• China and Taiwan Province of China join WTO at Doha meeting
• Banking crisis in Turkey
|• Argentina debt default is largest in history|
• Euro replaces physical currencies of 12 euro-area countries
Conference on Financing for Development held in Monterrey, Mexico.
• New Partnership for Africa’s Development
Hong Kong SAR prepares for millennium celebration.
World Trade Center shortly after terrorist attacks.
Euro symbol sculpture marks launch of new currency in Germany.
Organization of the IMF (As of April 30, 2002)
1 Attached to the Office of Managing Director.