Speaking in Paris to a meeting of parliamentarians from around the
world last week, Mr Strauss-Kahn said that the IMF was helping
countries affected by the crisis with policy advice and lending to
those that needed balance of payments support.
He also said the IMF was trying to limit the conditions attached to its
loans to terms that were essential for resolving each country’s
immediate economic difficulty, saying that often in the past, the Fund
had included conditions that were felt desirable for the country’s
future prospects, but were not necessarily directly related to the
achievement of objectives set under the programme.
He said the IMF was also trying to ensure that economic adjustments
agreed with governments in response to the crisis would take into
account the impact on the poor and most vulnerable.
"The Fund is trying to implement what I call ‘social conditionality’ –
helping countries develop or maintain safety nets for segments of the
population that may be affected by an IMF programme," Mr Strauss-Kahn
said.
He further reminded the group of 170 parliamentarians that: "The IMF
intervenes when things aren’t going well, so reform measures will
inevitably be unpleasant. But we have to make sure that these measures
affect as little as possible the poorest and most vulnerable
populations."Â
He noted that while people in advanced economies face a decline in
their standard of living or a decrease in purchasing power as a result
of the crisis, the world’s poor face the prospect of malnutrition and
even starvation, saying it was important to look beyond the current
financial crisis to the human costs of the other crisis, which is food
and commodities.
He further invited parliamentarians to attend a conference on Africa that the IMF is co-sponsoring in Tanzania in March.
Yunus Carrim, a parliamentarian from South Africa, noted in response to
Mr Strauss-Kahn’s statement that he expected the impact of the crisis
on Africa to be severe in terms of lower inflows of foreign direct
investment, a rapid decline of commodity exports because of slowing
demand from advanced economies, and a decrease in aid flows.Â
Mr Carrim also noted that parliaments needed to play a bigger role in
the discussions on governance reform. "It is important to reform the
governance of the IMF and World Bank now to enable them to better serve
its members," he told the IMF leader. The South African demand is in
line with reform calls from many other developing countries, poorly
represented in the IMF’s decision-making.