Making surveillance more effective
| Pages | 267-268 |
Page 267
"One of the core responsibilities of the IMF and its members," Hicklin says, is "the obligation to discuss and assess the national and international consequences of key economic and financial policies." Assessment of exchange rate policy has long been a vital part of this dialogue, but the IMF's analysis typically encompasses a broad range of policies. And the success of the surveillance process, Hicklin adds, is "critically dependent not only on relevant and insightful analysis, but also on cooperation and mutual trust." It is important, for example, that the IMF be seen to conduct surveillance in an evenhanded way across the membership."
Formal surveillance takes place in the context of a regular (typically annual) consultation between the IMF and member country officials that culminates in a staff report on the country's economy and policies. The report is then discussed by the IMF's Executive Board, which provides an opportunity for all member countries to contribute to the assessment.
The surveillance work with individual countries is more continuous than the formal process might suggest and is complemented, Hicklin observes, by multilateral analysis, including the World Economic Outlook and the Global Financial Stability Report. Surveillance has also become markedly more complex as the IMF has been challenged to devise better ways to assess potential vulnerabilities, including in the wake of the capital account crises of the past decade and the developments in financial markets. As Hicklin stresses, surveillance now benefits from a very broad range of IMF work-notably financial sector and vulnerability assessments and efforts to evaluate countries' observance of a variety of international standards and codes.
The theme of the most recent biennial review was how to make surveillance more effective across the whole membership. The question drew many recommendations; the challenge now, Hicklin says, "will be to implement them." The review, which concluded in July with an Executive Board discussion, focused on four areas, namely,
- the focus and depth of the IMF's economic analysis and policy advice;
- the nature of the policy dialogue with country authorities;
- communication of the IMF's policy messages, including signaling to creditors and donors in the context of surveillance; and
- assessments of the overall effectiveness of surveillance.
In general...
To continue reading
Request your trial