IMF advised to get out of loan business, concentrate on assessment and advice

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According to information from an independent committee that reported Tuesday on the lack of cooperation between the World Bank and the International Monetary Fund, the IMF should cease its offerings of long-term financing to developing nations and leave that work to the World Bank, where it properly belongs. The IMF should instead, the report said, concentrate on measuring the health of the economies of developing nations, provide policy advice and technical help, and approving World Bank lending programs. It should not provide loans, according to the report, because that uses up too many of its resources and compromises its ability to keep an eye on the economies of poor nations in which it has not invested money.The report was commissioned by the World Bank and the IMF a year ago. The committee was made up of current and former senior finance ministers from Indonesia, Brazil, Nigeria, and Germany.Among other findings of the committee was that the IMF should not try to involve itself in microeconomies and instead concentrate on macroeconomic issues in which it has more experience and expertise. The committee also found that there is a large amount of tension between the two institutions and that they do not talk to each other as much as they should.The IMF is not expected to be surprised or upset by the conclusions of the committee. It has, in any case, been reducing its granting of loans to developing countries, to the point where payments from its Poverty Reduction and Growth Facility program were only half in 2005/2006 of what they were between 1990 and 2004.