"The International Monetary Fund should stop offering long-term finance to developing countries, leaving the World Bank to be the global development agency, a high-level independent committee reported on Tuesday.
In a hard-hitting report on the lack of collaboration between the two international financial institutions, a six-strong committee concluded that the fund had spread its wings too far over poor countries, its work overlapped with the World Bank and that it should refocus its efforts on macroeconomic areas where it had greater expertise.
“The fund’s financing activities in low-income countries is an area where it has moved beyond its core responsibilities and into activities that increase its overlap with the world of the bank,” the report said, blaming the IMF for tramping on World Bank turf.
“The criteria for fund financing in low-income countries based on the concept of ‘protracted balance of payments need’ is so vague as to be difficult to distinguish from development finance in practice,” the report added.
- IMF told to stay away from World Bank’s turf
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