IMF Aiming to Restore Stability, Rekindle Growth

IMF work program focuses on restoring stability and confidence, reviving growth and jobs

Critical to swiftly complete borrowing arrangements for enhanced firewall

Aim to help low-income countries rebuild protective buffers, while supporting development

The IMF Executive Board’s semiannual discussion of the work program focused on the strategic priorities for the 188-member global institution. Expectations remain high about the IMF’s contribution to resolving the continued crisis in a durable manner, and to building stronger foundations for future growth and stability.

“The commitment to increase Fund resources by over $430 billion on a temporary basis attests to the membership’s willingness to act collectively and decisively to get ahead of the crisis,” IMF Managing Director Christine Lagarde said in presenting the work program to the Executive Board.

IMF Survey, the Fund’s online news magazine, spoke with Siddharth Tiwari, Director of the Strategy, Policy, and Review Department¸ about the IMF’s goals for the next six months, a period that includes a major meeting of the IMF and World Bank in Tokyo next October.

IMF Survey: Recent developments point to the continued fragility of the world economy and the risk of renewed stresses, particularly in Europe, with potentially systemic spillovers. What is the IMF doing to prevent contagion and help underpin the global recovery?

Tiwari: The IMF is acting on several fronts. In Europe, the epicenter of the crisis, it is engaging proactively with members and pan-European institutions in monitoring risks and advising on resolution measures. At the same time, analytical work is under way on ways of achieving credible fiscal adjustment while supporting growth, the scope for structural reforms in promoting jobs, and cross-border bank resolution mechanisms, among others things.

These topics have relevance not just for Europe but also for several other members of the IMF. For countries in crisis, the imperative remains to implement well-designed programs. An upcoming discussion by the IMF Executive Board leading to the review of Fund conditionality should help in drawing early lessons.

There are very important challenges confronting the broader membership, beyond Europe. Supporting the economic stabilization and transformation of Arab countries in transition is one.

Another is understanding the factors underpinning inclusive growth; without jobs and social equity, the gains from adjustment and...