When the IMF comes to town: why they visit and what to watch out for

In most rich countries the news that a mission from the International Monetary Fund is coming to visit is met with indifference. But, in most African countries the news can cause great consternation.History has a lot to do with it. The citizens of many African countries have suffered through their governments, under IMF pressure, cutting subsidies and social spending, firing public sector workers and increasing taxes.

This article seeks to remove some of the mystery surrounding IMF visits to a country. It explains the two basic reasons for the IMF sending its staff on “missions” to a country. And what can be expected in each case. To fulfil these responsibilities, the IMF sends its staff on two basic types of missions to member countries.

The IMF staff will also normally meet with members of parliament and with representatives of business and labour. They may also meet with representatives of civil society.First, while the IMF provides some guidance to its staff, it does not require them to follow any particular procedures for informing interested parties that it is visiting the country.

These recommendations are purely advisory. In principle, the country is free to ignore them. This may be the case if the country is confident that it will not need IMF financing in the future. This is the reason that the citizens of rich countries do not usually care that an IMF mission is visiting their countries. However, this is a luxury that a country cannot afford if it thinks it may need IMF financial support.

This means, inevitably, that the terms of IMF financing are controversial. First, the scale of the sacrifices necessary to restore a country to macroeconomic health are not easily determined. They depend on perceptions of the causes of the country’s crisis, assumptions about future economic developments and the capacity of the government to implement policy changes and the public to accept and absorb these changes. Reasonable people can, of course, have different views on these issues.

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