Mr. Köhler Sets the Stage
What does the IMF’s new head have to say about the role of the Fund?
May 1, 2000
On Monday, May 1, Horst Koehler takes over as the new Managing Director of the IMF. In a recent series of interviews with news organizations around the world, Mr. Köhler presented many of the different elements of his core message. Viewed together in our collection of quotes, a clearer picture emerges as to how Mr. Köhler plans to deal with the IMF’s key constituencies.
How do you plan to deal with U.S. criticism of the IMF?
“I would like to embark on a dialogue where I advocate an understanding of the independence of the IMF — not that it is independent of its shareholders, but that it not be pushed around like a yo-yo by daily events or by, say, national agendas.”
(Horst Köhler, IMF managing director, March 2000)
What, in your view, is the IMF’s core mission?
“Whatever we do with crisis management, aid to the developing countries, the most important thing to achieve is sustained growth in the world economy. And that’s not only in developing countries, but really in the global economy — including the developing countries and the emerging markets. That’s my most important thing.”
Should the IMF cede some of its role to the private sector?
“The IMF will not abandon its role of providing financing aimed at encouraging growth in some of the world’s poorest countries and will seek to ensure that it has a mandate from people in developing countries.”
What is your reply to suggestions that funding of the IMF should be withdrawn?
“As often happens with politics, when something gets more difficult, then there is a search for scapegoats.”
Does the IMF cause moral hazards?
“It cannot be that private investors pocket attractive returns when things are going well, but that the IMF is there to bail them out when things don’t go well.”
What is your message to the emerging markets
“It is important that recipient countries do not get used to borrowing from the IMF.”
Do you think capital controls can work for a country?
“When one sees that a country cannot come to terms with the flood of capital inflows, it should be possible to slow that down for a short term.”
Should loans be made conditional on human rights records?
“If a country is totally out of the standards of the international community, I do think that the IMF should reconsider further support to this country.”
How do you view the developments in Russia?
“We should accept Putin’s idea to build up a strong state as a Russian expression of the need for law and order. The question is how far Putin goes with his idea of a strong state.”
What is your evaluation of former IMF loans to Russia?
“With hindsight, there was too much of a feeling that with money, you can buy reforms.”
Will Russia’s President make the right decisions?
“In my sense, a strong state signifies the need for sound institutions that allow the private sector to flourish. I have the feeling Putin will try to go this way. If he still has the feeling a strong state is everywhere, interferes in everything, that would be a misunderstanding.”
What challenges does globalization pose for the IMF?
“Globalization means we cannot tolerate a world in which some are getting richer while others are getting poorer.”
How can the IMF promote growth?
“The IMF should be even more than in the past a crucial cornerstone to secure growth and stability in the world — or in the global economy.”
And finally, a word on your nomination?
“It is hard not to feel sympathy for anyone put up as a candidate to run the International Monetary Fund.”