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The Future of the International Monetary Fund
Are our international financial institutions fit for the future? This is a question being asked at the annual meeting of the International Monetary Fund in Marrakesh. If one wants to think deeply about the IMF’s future, one need to go no further than to consider its past. Those assembled at Bretton Woods in 1944 were haunted by the memory of the beggar-thy-neighbour policies that contributed to the Great Depression and the march towards war. But much has passed since and ambition has been lost. Here are five things it could do today to make our international financial system better suited for an age of global shocks and crises, more symmetrical and better able to drive financial flows towards development.
Are our international financial institutions relevant and fit for the future or even the present? This is a question being asked at the annual meeting of the International Monetary Fund (IMF) in Marrakesh (9–15 October). If one wants to think deeply about the IMF’s future, one need go no further than to consider its past. Those assembled at the World Monetary Conference in 1944, including R K Shanmukham Chetty, independent India’s first finance minister, were haunted by memories of beggar-thy-neighbour policies that contributed to the Great Depression and the march towards war.
The articles establishing the fund describe a different moment and character than today, but also a highly relatable desire to support the stability of economies, currencies, and the flow of international trade and finance. They set out to achieve this goal by providing credit, liquidity, expertise and by determining international exchange rates. Pursuing the same goals 22 years later, the Fund’s shareholders created special drawing rights (SDRs)—rights to borrow other countries’ reserves—to bring more symmetry and balance to the global system.
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