The International Monetary Fund (IMF) should scrap its long-term lending programmes to poor countries because it lacks competence on issues such as reducing poverty, according to a new report, The Future Role of the IMF in Development: An ODC Task Force Report, by the Overseas Development Council (ODC). The report, signed by 14 experts, calls for the Fund to focus on analysing the macroeconomic components of programs, while the Bank assumes overall responsibility for poverty reduction and growth aspects.
The Fund’s Poverty Reduction and Growth Facility (PRGF) should be closed and the resources transferred to the Bank. IMF lending should be for short-term, stand-by agreements for countries with macro-economic problems, with conditions limited to reforms necessary to restore macroeconomic stability. The report argues that transparency between the Fund and its clients would be improved if policy advice and surveillance was delinked from lending, also making policy reform more credible to foreign investors. Also, the implicit IMF veto on World Bank lending for adjustment should be eliminated.
The report also calls for a re-allocation of voting power on the IMF‘s board to give developing countries a greater voice.