IMF to open up its books

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The Independent Online
THE INTERNATIONAL Monetary Fund has agreed to start making its own financial affairs public as part of a shift towards greater transparency.

The move is one of the reforms promised by the institution as part of the deal announced by the Group of Seven industrialised nations on Friday that secured it more US funds.

"There is growing awareness that public institutions, including the IMF, need to enhance their accountability through greater transparency about their operations, objectives and decision-making processes," G7 officials said.

"We believe that, as a general principle, the IMF should adopt a presumption in favour of the release of information, except where release might compromise confidentiality."

The IMF will publish its usable resources and liquidity ratio - usable resources divided by its liabilities - on a regular basis, to counter criticism from the US Congress that it is too secretive.

Until now, it has been difficult to calculate how much cash the Fund has available, a factor that complicated the White House's efforts to persuade Congress to agree to put up more money.

Some Congressional critics protested that the IMF already had enough money. A budget agreement cleared the way for the US to put in $18bn (pounds 10.7bn) in new cash for the New Arrangement to Borrow and increase the IMF's regular funds, but right-wing Republican Congressional leaders demanded reform in exchange.

Further reforms are under discussion that could open up the IMF's Executive Board, its sitting management body in Washington, to further scrutiny. It will discuss mandatory disclosure of the Board's discussions of national economies, and of policy discussions on such matters as capital liberalisation. But any firm decision is six months away, an official said on Friday.

The IMF is an unusually secretive organisation, with a culture that is resistant to releasing information. In part, this is because it has some very sensitive financial information on its books. Stanley Fischer, the IMF's first deputy director, said on Friday that member states were the problem.

"The Fund is complicated," he said. "We have 182 member countries. They don't all see things the same way."

In partial recognition that its efforts to communicate have been unsuccessful, the organisation has also solicited bids for a review of its communications by an external firm.

The communique also urges the IMF to "develop a formal mechanism for systematic evaluation, involving external input, of the effectiveness of its operations, programmes, policies and procedures."