Russian finance minister calls on IMF to return to core tasks from optional ones, change lending policy
MOSCOW. Oct 14 (Interfax) - The International Monetary Fund (IMF) must return to its original, exclusively economic mandate, restore unified and non-discriminatory approaches to lending to countries, develop fiscal and budgetary recommendations, and develop tools for supervising their strict implementation, Russian Finance Minister Anton Siluanov said in a statement ahead of a meeting of the International Monetary and Financial Committee (IMFC) which will be held in Bangkok as part of the annual meeting of the governing bodies of the IMF and World Bank Group on October 15-17.
In addition to these events, Siluanov will take part in the meeting of the heads of central banks and finance ministers of the G20.
In his statement, Siluanov said that three functions of the IMF are currently weakening - surveillance, lending and countries' capacity development. In terms of surveillance, the fund devotes considerable attention to optional areas, he said. "Therefore, we support the fund's intention to return to its key task - the analysis of macroeconomic policy and the preparation of effective recommendations for countries," Siluanov said.
In terms of lending, there is a high concentration of the fund's portfolio, heterogeneity in the application of rules, and the influence of political factors on individual IMF decisions, Siluanov said. "More than 61% of the IMF's outstanding loan falls on the five largest borrowers. The high concentration is of a sustained nature: with growing lending terms, the composition of the largest borrowers has not changed for five years, and over 90% of the outstanding loan falls on countries that have maintained debt to the fund for more than six years," he said. Lending to the same countries, in Siluanov's opinion, increases dependence, requires heightened attention to the creation of reserves, and also hinders the distribution of funds in favor of the most needy, vulnerable states.
Siluanov drew attention to the problem of repeated violations within individual lending programs. "During the period 2002-2024, in 56% of programs under which countries were granted permission to deviate from quantitative performance criteria (QPC), violations were repeated. Moderate flexibility in the implementation of programs may be justified under conditions of shocks, but repeated violations should not become the norm. In such cases, in order to maintain discipline among borrowers, the fund should establish for countries more specific, measurable, and time-limited corrective measures," he said.
Siluanov also noted the heterogeneity in the application of the IMF's rules, when the bulk of the funds under higher-risk programs is provided at one time, and lending rules are adapted to specific borrowers. "Exclusive practices in favor of individual countries that destroy the uniformity of approaches in the IMF's lending policy are unacceptable," he said.
Given the decline in the share of fully successful lending programs, the IMF should play a greater role in monitoring and implementing measures to reduce budget deficits and public debt of member countries, he said.
"The fund needs to pay closer attention to monitoring systemically important reserve currency issuing countries and conduct analysis of cross-border effects. Without effective and impartial IMF surveillance, the global financial system remains vulnerable to risks that are transmitted through reserve currency channels to other countries," Siluanov said.
