Bring the fund down to earth

Abstract

Why the IMF's advice to developing countries seems to come from a remote place. Particularly since 2008,the IMF has been providing useful service to the global economy. In its annual meetings last month,the IMF cautioned the major economies about the persistent risks, emerging challenges and weak recovery. While the IMF generally gives good advice,in some cases it is clear that there is a lack of practical experience. To illustrate,practitioners from any country would know that when faced with sudden capital movements, capital controls —and not quick attempts to erect macro prudential norms are the only effective tools. Similarly,earlier,there was a reluctance to accept that inflation targeting was unfeasible for many countries. This late recognition of simple facts can do immense harm to the countries being advised. he other area is forecasts,especially for developing countries,which are frequently changed and can have financial implications for markets and ratings. Illustratively,Finance Minister P. Chidambaram had to contest the latest estimates made by the IMF on India's growth rate. Read more at: https://indianexpress.com/article/opinion/columns/bring-the-fund-down-to-earth/