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The IMF and Globalization

What does the IMF say about globalization and what do others say about the IMF?

March 14, 2001

What does the IMF say about globalization and what do others say about the IMF?

The International Monetary Fund is always at the epicenter of the globalization debate. During the past few years, the IMF has experienced a public relations roller-coaster ride — and has been blamed for just about every rough spot in the global economy. Recently, the waters have seemed to calm a bit. This Read My Lips feature looks at what the IMF has to say about globalization — and what others think about the IMF.

How long has globalization been around?

“Globalization is not new. Economic globalization is as old as history — a reflection of the human drive to seek new horizons.” (Stanley Fischer, First Deputy Managing Director of the IMF, January 2001)

So just what is the role of the IMF in this?

“Rather than being somehow the architect or promoter of globalization, we really are trying to understand it and, to some extent, be a factor to moderate the downsides of globalization.” (IMF External Relations Director Thomas Dawson, July 2000)

What is the most important task of the IMF?

“Whatever we do with crisis management, the most important thing to achieve is sustained growth in the world economy.” (Horst Köhler, IMF Managing Director, on extending the role of the IMF, March 2000)

What has caused this rethinking?

“Ours is the first generation in history that finds itself in the position of being called upon to influence global affairs — not from a position of military conquest or imperial power, but through voluntary international cooperation.” (Michel Camdessus, former IMF Managing Director, March 2000)

What is the impact of globalization on individuals?

“Globalization is not painless. Economists talk in the abstract about labor moving from low productivity to high productivity uses. But it is individuals and families who have to do the moving.” (Stanley Fischer, January 2001)

How is the IMF’s record on poverty so far?

“The IMF has become the Typhoid Mary of emerging markets, spreading recessions in country after country.” (Harvard University Professor Jeffrey Sachs, on the IMF, June 1998)

Others are more charitable in their assessment:

“One part wealthy benefactor, one part stern schoolman — and one part global firefighter.” (Princeton economist Alan Blinder, describing the IMF, September 2000)

What about the loss of national or regional identity?

“We are indeed moving towards becoming one world — but thankfully we shall never get there, for all humans and societies like also to retain their particularity.” (Stanley Fischer, January 2001)

What does the IMF think about countries going it alone?

“Every nation needs to decide for itself how — and how quickly — it wants to open up to international finance markets. I am prepared to give home-grown experiences a chance.” (Horst Köhler, IMF Managing Director, April 2000)