Kristalina Georgieva gave hints on what future loans from the International Monetary Fund should look like

Paula Lugones

09/09/2021 11:21

• Clarín.com

• Economy

Updated 09/09/2021 11:21

The managing director of the International Monetary Fund, Kristalina Georgieva, gave

some clues on

Thursday

about how the aid programs

to the countries should be - at a time when she is negotiating a new plan with Argentina - and warned that the growth boost will not it may be above the central objective of the agency, which is to

solve balance of payments problems

.

Georgieva responded to a report from the

IMF's Independent Evaluation Office

(IEO), which evaluated various aid programs to different countries between 2008 and 2019 and made recommendations for future programs.

The report did not specifically include the case of Argentina.

This office was established in 2001 to make independent and objective evaluations of the Fund's policies and activities.

It is totally independent of the management direction of the organization and maintains a distance from the Executive Board

.

Its director is Charles Collyns.

In a statement, Georgieva noted: "I am pleased with the IEO's conclusion that there is no evidence of a consistent bias towards excessive austerity in IMF-supported programs during the evaluation period."

The 97-page report, focused on growth and adjustment, makes three recommendations for future Fund programs.

Recommendation 1:

Attention to the growth implications of IMF-supported programs should be more comprehensive, systematic, realistic, and sensitive to social and distributional consequences.

Georgieva supported this initiative, but with “caveats”.

"I agree with the need for a more in-depth discussion on growth issues in IMF-supported programs," he said.

“At the same time, while it is important to support economic adjustment and reforms for sustained growth in the medium term (for example, objectives of fiscal balance or debt sustainability),

growth cannot be above or on par of the central objective of IMF loans to help member countries solve their balance of payments problems ”.

"The focus should be on how we can provide further guidance on the role of IMF-supported programs in fostering sustainable growth,

taking into account the quality of growth,

" Georgieva said.

"I also agree with the recommendation to pay more constant attention to contingencies due to growth deficits," adding that "in some cases, contingency discussions with authorities

must be confidential to avoid adverse reactions in the market."

"Finally, I agree with strengthening the monitoring of key social and distributive metrics when feasible."

And he added that "although some country teams are already examining the distributional consequences of adjustment and reform policies, a more systematic incorporation of these evaluations into program design would require specialized personnel."

Second recommendation:

IMF-supported programs should pay greater attention to supporting deep, growth-oriented structural reforms, with more effective collaboration with specialized agencies beyond the IMF.

Georgieva supports this initiative, saying: “

I agree to focus more on growth-oriented structural reforms,

effective capacity development and collaboration with partners such as the World Bank”, especially on structural fiscal issues and social support for development. financial.

Third recommendation:

The IMF should continue to invest in the creation of a set of modeling and monitoring instruments

that can be applied as a basis for analyzing the relationship between adjustment and growth and assessing the evolution of growth in the context of the Program.

The Managing Director fully supported this initiative.

Washington.

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