BERKELEY – The relationship between the International Monetary Fund and the G-20 is symbiotic but conflicted. Like a long-married couple who habitually bicker and fight, the two can’t seem to live together – but they can’t live apart, either.
The question of what to do about this relationship is coming to a head in advance of the November G-20 summit chaired by South Korea. Since the 1997-1998 crisis, Asian governments have sought to keep their distance from the Fund.
It is admirable, therefore, that South Korea’s government has taken the lead in discussions about reforming the IMF’s mandate. It has contributed significantly to international thinking on the design of new lending facilities.
The IMF’s crisis-prevention efforts begin with its country surveillance, as provided for by Article IV of its Articles of Agreement. The problem with these exercises is that they are regularly relegated to the “duly noted” bin: governments receive them, file them away, and go back to doing what they were doing before.