'Istanbul Decisions' to Guide IMF as Countries Shape Post-Crisis World
| Author | International Monetary Fund |
A year ago, people feared the worst. But after concerted action to combat the crisis, the world had pulled back from the brink. "Even if it is much too early to declare victory, we have at least stepped onto the road to recovery."
Speaking at the IMF-World Bank Annual Meetings being held in Turkey, Strauss-Kahn told the world's economic and monetary policymakers they have an historic opportunity to create the conditions necessary for "a virtuous cycle of peace and prosperity" if they continue to work together and with the IMF on key policy measures.
Strauss-Kahn noted the "profound change" that formal and informal cooperation among nations had brought, adding that "in the face of crisis, countries came together to face common challenges with common solutions, focusing on the global common good." The IMF chief pointed to fiscal stimulus amounting to nearly 2 percent of world gross domestic product in the past year as a critical factor in staunching the crisis, and he stated that countries are moving to address key weaknesses in their financial sectors, which will further underpin recovery if they stay the course on these reforms.
He told delegates that "We have come a long way, but the journey is not over." Coming out of the October 4 meeting of the International Monetary and Financial Committee (IMFC), the policy-steering committee asked the Fund to address four key reform areas-the IMF's mandate, its financing role, multilateral surveillance, and governance. These "Istanbul Decisions," he said, will be a focal point of IMF activities for the coming year.
The committee agreed to maintaining stimulative policies until global economic recovery is assured, and backed moves to reform governance of the Fund to give greater voice to dynamic emerging markets and developing countries.
The four decisions comprise
* A review of the mandate of the IMF, to encompass the whole range of macroeconomic and financial sector policies that affect global stability.
* Assessing how to build on the success of the Flexible Credit Line and provide insurance to more countries as the lender of last resort. Given that IMF resources are limited relative to the precautionary demand for reserves, the IMFC asked the Fund to look at whether enhancing its financing instruments and facilities...
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