WASHINGTON, October 06, 2014 - Seven years after the onset of the global financial crisis, the world still has a way to go to secure a sustainable recovery marked by strong growth that supports rapid job creation and benefits all, International Monetary Fund (IMF) Managing Director Christine Lagarde says in her foreword to the institution’s Annual Report 2014—From Stabilization to Sustainable Growth, published Friday.
“The recovery is ongoing, but it is still too slow and fragile, subject to the vagaries of financial sentiment. Millions of people are still looking for work. The level of uncertainty might be diminishing, but it is certainly not disappearing.” Ms. Lagarde said that “throughout the crisis and in the recovery period, the IMF has been, and continues to be, an indispensible agent of economic cooperation” for its membership.
The report covers the work of the IMF’s Executive Board and contains financial statements for the year May 1, 2013, to April 30, 2014. It describes the IMF’s support for its 188 member countries, with an emphasis on the core areas of IMF responsibility: assessing their economic and financial policies, providing financing where needed, and building capacity in key areas of economic policy.
On the financial front, the IMF continued to support members’ reform efforts across the globe. This year, the Fund’s Executive Board approved $21.5 billion in financing for member countries, plus $220 million in concessional financing for low-income countries. The Board reviewed facilities such as the Flexible Credit Line, the Precautionary and Liquidity Line, and the Rapid Financing instrument—to make sure that they continue to help countries as effectively as possible. The membership also agreed to transfer gold profits to help meet the financing needs of low-income members in the years ahead.
Since the crisis broke, the institution has provided training to all of its members and technical assistance to 90 percent of them, helping countries design, build, and strengthen the institutions that make up the building blocks of economic success. For the fourth straight year, the Fund increased its delivery of technical assistance, especially in low-income countries, and increased spending on training. Demand for technical assistance continues to be strongest in the fiscal area, but it has been growing across all regions. Over the past year, the IMF launched new tools and courses, opened a new regional technical assistance center in Ghana, and received $181 million in new donor funds.
During the year, the IMF has better integrated bilateral and multilateral economic surveillance, especially through its Spillover and External Sector Reports, as well as reports on groups of countries (clusters). It has helped countries in such areas as fiscal policy in advanced economies; growth strategies and structural reforms in emerging markets; and vulnerabilities, diversification, and structural transformation in low-income countries. It has also stepped up work on topics with implications for stability and growth—including inequality, the environment, and the economic participation of women.
The IMF has made it a priority to better integrate bilateral and multilateral monitoring and advice. The Managing Director’s Global Policy Agenda, laid out at both the Annual Meetings in 2013 and the Spring Meetings in 2014, emphasized the need to strengthen the coherence of policies and cooperation among policymakers. The priorities are clear: advanced economies need to focus on measured and well-communicated policy choices to secure the recovery; emerging markets need to strengthen their fundamentals, reduce their vulnerabilities, and step up structural reforms; and everyone needs to embrace cooperation and engage in dialogue.
In the Annual Report, Ms. Lagarde reflects on the 70th anniversary of the founding of the IMF. “Back in 1944, global leaders were determined to put the chaos and carnage of war behind them, and build a world based on collaboration instead of conflict, integration instead of insularity. The IMF was founded on the core principle that the route to national prosperity runs through global prosperity.”
International Monetary Fund/Washington