The Guardian on IMF's future

money.jpg The IMF has certainly been in the headlines recently with its discourse on dollar depreciation and the publishing of the World Economic Outlook.

Meanwhile The Guardian has a thougtful leader about IMF's future and legitimacy as an institutional framework in the global economy. The main argument is that with many of the other large global spanning institutions' postwar heritage it might be time to re-evaluate their structure or perhaps even their existence.

"What is the International Monetary Fund for? To its critics on the left, the answer is easy: to foist the harsh discipline of markets on those desperate enough to need its help. If that were true in the past, then it is hardly the case now.


The best place to begin any reforms is with the fund's governing makeup. Like the UN security council or the G7, the IMF's structure is a postwar relic. Voting power is determined by quotas that give Europeans and the US the biggest say. That must change. It is ridiculous that Belgium carries more weight than Brazil, South Korea or India.


If the IMF had greater legitimacy, especially in the developing world, it may yet turn into a robust international umpire and debating forum. But will anyone take notice? This week the IMF made stinging criticisms of US economic policy. The US's response was to tell the fund to mind its own business. At the time the IMF was born, Keynes himself warned: "There is scarcely any enduringly successful experience yet of an international body that has fulfilled the hopes of its progenitors." So far he has been proved right." 

Perhaps it is due time to look within for the IMF?