Kick-Starting Economies After the Dust Has Settled
| Author | Conny Lotze |
| Position | IMF External Relations Department |
| Pages | 2-5 |
Page 2
When the guns fall silent, the rebuilding begins. From the Great Lakes of Africa to the mountains of Afghanistan and the coffee plantations of Timor-Leste, the IMF is helping revive economies devastated by bloodshed. As part of international efforts to restore stable political and economic structures, the IMF moves in swiftly to help set up the foundations for a functioning economy.
Countries emerging from conflict need the capacity to provide essential public services and implement sound economic policies so that people regain confidence that recovery is within reach.
The IMF's role in postconflict countries is part of its broader responsibility to provide policy advice and technical assistance in its core areas (see page 26) and, where appropriate, financing for member countries. The work requires a high degree of flexibility and ingenuity. While some conflicts result in the emergence of new countries, others bring about the complete overhaul of old rules and structures.
The IMF has long been working with countries transitioning to different political and economic systems. In the 1960s and 1970s, the IMF helped many newly independent developing countries set up their monetary and fiscal systems. In the 1980s, it stepped up its assistance for structural reform in low-income countries; and in the 1990s, it assisted the countries of the former Soviet Union, and in Central and Eastern Europe in their transition from centrally planned to market economies. The IMF has built on these experiences in its postconflict work, which has intensified since the international community formally requested the IMF's help in the reconstruction of Bosnia and Herzegovina under the 1995 Dayton Peace Agreement.
"Committed individuals can make a big contribution in postconflict work, but the foundation is a major team effort within the IMF and among the international community," says Scott Brown, who was IMF mission chief for Bosnia and Herzegovina during 1995-98 and subsequently worked in Kosovo and Iraq. The IMF usually plays a major role in advising on the overall economic policy framework and the rebuilding of postwar monetary, financial, and fiscal institutions, which involves the respective IMF area department and the Fiscal Affairs, Finance, Legal, Monetary and Financial Systems, Policy Development and Review, and Statistics Departments. Other organizations establish and maintain security-typically under United Nations, NATO, or other multilateral auspices-and major donors coordinate political assistance and mobilize aid.
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The IMF's work begins-often while the conflict is still going on-with thorough planning and strategy sessions at headquarters and consultations with potential development partners.
Internal working groups coordinated by top IMF management draw on accumulated experience. As soon as it is reasonably safe, IMF staff usually enter a postconflict country as part of a team representing several international organizations.
In Bosnia, a small team comprised of staff from the World Bank, the European Union, the European Bank for Reconstruction and Development, and the IMF visited Sarajevo and Mostar as soon as the cease fire took hold in October 1995. The authorities were ready to get to...
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