Is there a role for the IMF?

It's not just Martin Hutchinson who looks at the IMF's report on financing its running costs and sees a picture of obsolescence. The Economist, too, is getting in on the act:

Mr Crockett's team wants the fund to fund itself by building an endowment it could live off forever. But if this goes on, the IMF will have to answer the question: should it live forever? If borrowers won't take its tainted lucre, and financial crises remain so scarce on the ground (admittedly two GIGANTIC if's), then the calls for the IMF to dissolve itself and return the money to its national shareholders—a position formerly the province of the lunatic left and reactionary right—will start to sound a lot more reasonable.

It's probably worth pointing out that none of the IMF's shareholders really need the money: Brazil and Saudi Arabia don't need more foreign reserves, and Italy and the USA aren't going to pay down much in the way of debt if they get their IMF quotas back. Much better that the money stay in Washington, just in case: no one thinks that there will be no more global monetary crises, ever.

What's needed is a way of bringing the Fund out of the red – and the Crockett report comes up with exactly such a way. Sell the gold, which is doing no good sitting in vaults, and buy income-producing bonds which can be used to pay economists to do crucial-if-boring things such as the generation of reliable and internationally comparable macroeconomic statistics. The Economist, of all publications, should like that idea!

Posted by Felix at 2:21 EST