IMF study gives high marks to its crisis support
International Monetary Fund (IMF) support of 15 emerging market
countries in the global financial crisis helped them weather the worst
of the turmoil, according to an internal IMF study published Sunday.
A mix of increased resources, policy flexibility, and more focused
conditionality on financing had allowed the IMF to provide improved
support, the 186-nation institution said.
In the report "Review of Recent Crisis Programs," the IMF said the
fund-supported programs were delivering the kind of policy response and
financing needed to help cushion the blow from the worst financial
crisis since the 1930s Great Depression.
"What this study tells us is that, with IMF support, many of the
severe disruptions characteristic of past crises have so far been either
avoided or sharply reduced," IMF managing director Dominique
Strauss-Kahn said in a statement.
Strauss-Kahn underscored that serious challenges remained,
particularly in restoring sustained economic growth and higher
employment, but he also said there were "encouraging signs of
stabilization."
"The governments and peoples of the countries concerned deserve the
credit for these efforts," he said.
Still, the study cautioned that daunting challenges remain as the
global economy stabilizes from the worst global recession since World
War II, including the timely unwinding of fiscal and monetary stimulus
and fixing bank balance sheets.
The economists compared the typical economic and financial effects of
past crises and analyzed why those outcomes had been avoided so far in
most cases in Armenia, Belarus, Bosnia & Herzegovina, Costa Rica, El
Salvador, Georgia, Guatemala, Hungary, Iceland, Latvia, Mongolia,
Pakistan, Romania, Serbia, and Ukraine.
Key factors for the improved results included the fund's rapid
mobilization of large financing packages for countries hit by the global
financial turbulence of late 2008 that followed the collapse of Wall
Street investment bank in mid-September.
Almost all the financing packages provided access beyond the normal
limits to fund resources, with more front-loaded disbursements. In a
number of European programs, private sector involvement was sought.
"Importantly, official financing has been used more to meet actual
funding constraints of the private and public sectors, less to replenish
central banks reserves," the IMF said.
Other key factors were the front-loading of financing to sectors
facing the tightest financing constraints; emphasis on protecting the
financial sector from liquidity squeezes; and fewer conditions on
financing.
AFP |