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Twelve years in review

Author(s):
International Monetary Fund. External Relations Dept.
Published Date:
January 2002
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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..

For the complete IMF chronology, see http://www.imf.org

199019911992199319941995
…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
1996199719981999200020012002
• 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

•UN

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.

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