[stop-imf] I.M.F. TO BECOME MORE FLEXIBLE, REALISTIC ON CONDITIONS.

[Robert Weissman]

>From World Bank's Development New Press Review
1/11/02

I.M.F. TO BECOME MORE FLEXIBLE, REALISTIC ON CONDITIONS.


I.M.F. TO BECOME MORE FLEXIBLE, REALISTIC ON CONDITIONS.  The IMF will
become
more flexible in its requirements and will take into account "realistic"

political conditions in borrowing nations, AFP reports IMF chief
spokesman
Thomas Dawson said today in Singapore at a speech to the American
Chamber of
Commerce.

The comments came after criticism that the Fund prescribes bitter
medicine that
worsens, rather than improves, the condition of countries needing its
financial
bailouts.

Dawson, the director for external relations at the IMF, also refuted
allegations
the Fund has failed to learn from the lessons of the Asian financial
crisis in
1997-1998 and was to blame for the crisis in Argentina.  "Certainly in a

numerical sense, we ... believe that we have fewer conditions in
programs than
previously," he said.  "We are attempting to prioritize them and focus
on those
that are more important for the macro performance, and work with the
government
on a better sense of what the political realism is."  Such conditions
will be
"better targeted and politically realistic" with the aim of becoming
more
effective.

He acknowledged the Asian crisis had taught the IMF important lessons,
among
them the need to ease excessive conditions and be more flexible.
Flexibility
can come in the form of giving more time for reforms to be carried out,
he
added. "There are times when we recognize that particular actions may
wind up
taking a longer period of time than we necessarily had anticipated in
the
beginning," he said.

On Argentina, Dawson said the actions taken by finance officials such as
pegging
the peso currency to the US dollar, a zero-deficit policy and austerity
measures
were their own and were not dictated by the IMF.  "The Fund was never
dictating
anything to Domingo Cavallo," he said, referring to the Argentine
finance
minister who resigned last month as Argentina slid toward insolvency.

Dawson also said the risk of a contagion from the Argentine crisis
spreading
into Asia was limited.  Dawson said Asian economies were now better
prepared to
recover from the global downturn than they were in previous economic
slumps.
"The financial contagion from Argentina's crisis appears so far to be
quite
limited, although some fear an intellectual contagion in the form of a
backlash
against market-oriented policies in emerging markets," he said.