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What next for the IMF?

What next for the IMF?
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A new boss at the International Monetary Fund almost certainly means new directions for the global lender.

How will its role change under Christine Lagarde? How much of a bigger say will the world fast-rising developing economies get?

At the New York Forum economic conference euronews sought the thoughts of movers and shakers in the financial world.

Economist Amar Bhidé of The Fletcher School at Tufts University questioned the very existence of the IMF.

He said: “If it just became a talking shop, it would be fine, but we have the OECD to do that. We have the OECD to produce reports and provide a forum for discussions and why do we need both the IMF and the OECD. In this age of austerity shouldn’t we be thinking of cutting back on bodies that don’t need to exist rather than desperately floundering around to find a mission for them that makes some sense.”

Given that it is not going to be shut down, what about the complaints of countries like China, India and Brazil that they should have a bigger say to go with their growing economic clout?

Edmund Phelps, winner of the 2006 Nobel Prize for Economics, responded to that question: “In a way that seems perfectly reasonable and normal and appropriate – on the other hand it is the rich countries’ money, that was the original idea, and of course since it is their money they would rather like to have a decisive say about how it is used.” In essence – you pay, you play.

And Luis Alberto Moreno, President of the Inter-American Development Bank, said that regardless of who is running it the IMF has a big job to do.

He said: “The role of the IMF is, of course, always going to be dealing with some of the major balance of payments difficulties that countries can have, and helping solve those types of problems. The other issues relate to the monitoring that the IMF can do and the early warning systems they can put in place and advancing in those directions is the way to go.”

New IMF director Christine Lagarde now has the chance to implement her own ideas, just as soon as she has headed off a debt default by Greece.

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