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IMF/World Bank: Global Rescue Team?

What do the IMF and World Bank have to say about their importance in global development and finance?

September 26, 2002

What do the IMF and World Bank have to say about their importance in global development and finance?

For some years now, the IMF and World Bank — the two main international financial institutions — have been in a hotseat. Criticism has been leveled at them from many quarters. Our new Read My Lips feature examines why the IMF and the World Bank and their supporters believe that they are important organizations.

What is hard to take about the present globalization debate?

“We seem to be the scapegoat for everything when it goes wrong.”

(Horst Köhler, IMF Managing Director, July 2002)

Is life easy when working for the IMF/World Bank?

“I meet superb professionals who regularly work 80-hour weeks, who endure long separations from their families. Fund staff have been shot at in Bosnia, slaved for weeks without heat in the brutal Tajikistan winter — and have contracted deadly tropical diseases in Africa.”

(Kenneth Rogoff, IMF Economic Counselor and Director of Research, July 2002)

What motivates international financial institutions?

“Our dream is a world free of poverty.”

(The Motto of the World Bank as displayed in the glass lobby of the World Bank building)

Is the IMF pessimistic in assessing developments?

“It is our job to always be concerned.”

(Thomas Dawson, Director of the IMF’s External Relations Department, December 2001)

Does the IMF get backing from outside the institution?

“No matter what mistakes the IMF and World Bank have committed, they are a bit of a false target for the critics, a lighting rod discharging the overall frustration of today’s civilization.”

(Vaclav Havel, president of the Czech Republic September 2000)

Why is the IMF crucial for sound economic policies?

“You need someone to occasionally say ‘No!’ to a bad compromise.”

(Rudi Dornbusch, the late Ford Professor of Economics and International Management at MIT, March 2002)

What makes the IMF so unpopular?

“The IMF is a dentist, more than a fireman. Nobody likes it, it hurts — but is needed.”

(Washington-based economic analyst, April 2001)

Would debt forgiveness solve the problem of poverty?

“Countries like Bangladesh rely on the World Bank — and would lose out if the Bank diverted its resources simply to wiping out debt.”

(Gordon Brown, Britain’s Chancellor of the Exchequer, April 2001)

Is the IMF critical of Western economic policies?

“How can leaders in developing countries — or in any capital — argue for more open economies, if leadership in this area is not forthcoming from wealthy nations?”

(Joint statement by Horst Köhler, James D. Wolfensohn and Mike Moore, the heads of the IMF, World Bank and WTO, May 2002)

What, in turn, does the IMF expect from developing countries?

“It is not credible for poor countries to ask for more market access — if they are not exploiting the possibility for market access among themselves.”

(Horst Köhler, IMF Managing Director, July 2002)

Is the IMF dependent on domestic cooperation?

“No amount of external financing can substitute for self-responsibility and political cohesion in a society.”

(Horst Köhler, IMF Managing Director, September 2002)

Is the IMF the all powerful organization it is sometimes believed to be?

“If we had half as much power as Mr. O’Neill [the U.S. Treasury Secretary] seems to imagine, we’d have cured cancer, abolished nuclear weapons and brought universal world peace.”

(Senior IMF official, May 2001)

And what about the IMF's learning curve?

“Our philosophy is that we want to learn from our mistakes. No institution, no person, no managing director of the IMF, no prime minister is perfect.”

(Horst Köhler, IMF Managing Director, November 2001)

So, how does the IMF tackle economic emergencies?

“The idea that policies are designed in a cold, dark room in Washington, D.C. — and then we come to countries and impose them is far from reality.”

(Samuel Itam, IMF Senior Resident Representative in Kenya, October 2001)

Finally, what is one example of political changes due to the execution of IMF advice?

“We created the conditions that obliged President Suharto to leave his job.”

(Michel Camdessus, then-IMF Managing Director, November 1999)