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The Changing Nature of International Financial Institutions

 

On February 21, the Fulbright Network of the World Bank Group and the International Monetary Fund hosted a panel discussion “The Changing Nature of International Financial Institutions (IFIs) Involvement in Upper Middle-Income Countries (UMICs).” This event marked the launch of a new BBL series devoted to raising awareness and stimulating discussions on addressing global development challenges that bring together representatives of IFIs, governments, non-governmental organizations, think tanks, and the private sector. The event opened with a presentation on the Fulbright Network by its founder Aleksandra Liaplina. The Network, which now unites over 170 Fulbright Alumni from 41 countries who work at the World Bank Group (WBG) and the International Monetary Fund (IMF), aims to leverage joint expertise, knowledge and resources in the field of international development.

The guest speaker of honor, the World Bank’s CEO Kristalina Georgieva, highlighted the importance of transmitting knowledge and expertise in a time of rapid economic and social change. An alumna of the prestigious Fulbright Alexander Hamilton program, Kristalina Georgieva opened her speech with the words of Senator J. William Fulbright: “We must dare to think ‘unthinkable’ thoughts. We must learn to explore all the options and possibilities that confront us in a complex and rapidly changing world.” These words are extremely relevant nowadays for IFIs, which are called on more than ever before to provide the quick transmission of their knowledge and expertise across all countries.

The panel discussion was moderated by Otaviano Canuto, Executive Director of the WBG Board of Directors, and featured four panelists: Teresa Ter-Minassian, Former Director of the IMF’s Fiscal Affairs Department; Monica de Bolle, Senior Fellow at the Peterson Institute for International Economics; Scott Morris, Senior Fellow and Director of the U.S. Development Policy Initiative at the Center for Global Development; and Johannes Linn, Nonresident Senior Fellow at the Brookings Institution.

The first half of the discussion focused on the importance of IFIs engagement with UMICs. Presenting the IMF’s perspective, Teresa Ter-Minassian, a Fulbright alumna, pointed to the evolving nature of IFIs involvement in these countries, with the expanding role of their surveillance activities, policy-making recommendations, capacity development, technical assistance, and expertise sharing. In her presentation, Monica de Bolle highlighted three fundamental roles of IFIs in UMICs. First, IFIs serve as a buffer for these countries during global risk aversion shifts and their own internal crises and help them diminish their regional disparities. Second, an important role of IFIs is to share their repository of knowledge and lessons learned from UMICs with other countries. Finally, IFIs provide assistance in shaping the policy debate and informing policy decisions in UMICs.

The second half of the discussion focused on major institutional and political challenges for multilateral financial institutions. Speaking about the current political environment, Scott Morris urged leadership in advanced economies, in particular the United States, to look at IFIs not as organizations to send money to other countries, but also as organizations that can provide direct benefits to developed countries in meeting many of the challenges that they currently face. Continuing this point, Johannes Linn, a Fulbright alumnus, underlined the importance of inclusion and cooperativeness between recipient and non-recipient countries within IFIs. He noted that to survive and play their increasing role in the multilateral world, those IFIs that are traditionally perceived as aid agencies need to move their organizational models toward credit and knowledge co-operatives for all members.

In his closing remarks, Otaviano Canuto noted that the future work is to find an agreement and to make governments across the globe understand that prosperity based on shared knowledge, expertise and resources is a win-win situation for both advanced economies and emerging markets.

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