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!

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