Reviews & Comments
21.07.09

I would have chosen the way of the IMF stabilization

Author: Elina Rybakova, Senior Economist of Citigroup in Russia and CIS countries

I’m very glad that you have invited different experts to participate in the study, both Russian and foreign. However, I think the geographical separation will vanish soon, as even here, in Russia, a whole generation of financial sector specialists will grow up and will emerge on the global level. In the survey I have been asked which country I represent. I can’t really say. Professionally, I’ve grown up in the United States. But I come from Latvia, and now I’m happy to work in Moscow. And there are more and more people like me appearing.

In the future we will also stop identifying countries as developing and developed ones, because nowadays it’s a case of economic globalization. The whole financial crisis polemics are only at the global level. It’s already common now that, for example, effectiveness of the fiscal agenda of the Unites States is being discussed in Moscow.

Concerning the International Monetary Fund, referred to in the report - in my opinion, creation of any new institution, instead of the IMF, would be very difficult at the moment, because any institution needs time to become efficient and building a new model now, in the middle of crisis, would probably take a lot of energy. Therefore, I would still choose the way of existing organization stabilization, simply because, first of all, two thousand professional high-class economists from the different countries, both from developing and developed ones, are being employed there. Second of all, the IMF has reviewed, analyzed and described in details each crisis, each fiscal policy change of almost every country since Breton Woods. The only question is how to use this data correctly.

From the other hand, I fully agree with the conclusion, that the IMF is a rather politicized organization and certain decision making secrecy still remains there. But this criticism has existed ten, even twenty years ago. And, I have to say, they’ve done some changes in their work. In any case, they have begun publishing their reports more often, even though as press releases. And we have to keep on pushing the IMF to openness. Yes, openness. This is what I’d do in the first place. The second is the necessity to increase the weight of developing countries in the IMF. And the third – it is necessary that the Fund’s Board delegated some fast decision making responsibility to the management.

I also agree with the fact that the IMF’s economic ideology is outdated, but it’s a common and outworn criticism. It turns out that all economic ideologies are obsolete. Otherwise we would not have been having a crisis. Both the Fund and the controls of other countries have missed this crisis, and we are going to miss some more. And we will learn each time. The Fund’s fault is more that it hasn’t been shouting about the possible problems loud enough, from one hand. And from the other hand, the trouble is that the Fund has no mechanism of forcing countries to modify their behavior.

Post-Crisis World Institute