At the International Monetary and Financial Committee
(IMFC) meeting of the IMF on 16 April the role of the IMF in
the global economic and political environment will be
discussed - Below a summary of the views of the Estonian
representatives.
Besides committee work a series of important meetings are
scheduled for the Estonian representatives. Inter alia,
discussions will be held on the profound analysis on the
efficiency of various Estonian financial supervisory
authorities and their compliance with the international
requirements. The analysis is being jointly prepared by the
IMF and World Bank.
***
Peter Lõhmus, Deputy Governor of Eesti Pank, and Tanel
Ross, Head of International Department, will participate in
the IMF International Monetary and Financial Committee
meeting.
The main focus of this year's meeting will be on the
global economic prospects and reforming the IMF's role. The
Nordic Baltic Constituency, where Estonia belongs, will be
represented by Sauli Niinistö, Finnish Minister of Finance.
The last co-ordination of the unified views of the
constituency will take place in Washington shortly before the
Committee meeting. At the Committee meeting starting on 16
April one of the core topics will evidently be the role of
the IMF in influencing the international economic and
political environment. For Estonia it is important to answer
the question how to assess the role of the IMF in Estonian
economic policy of recent years and what is the attitude of
Estonia to the recent criticism of the IMF.
Co-operation in economic policy with the IMF and the
memoranda of economic policies play a decisive role in
Estonia's development. The support and practical advice given
by the IMF were of relevant importance for the success of the
1992 monetary reform and the economic reforms following it.
Also, the support of the IMF given to the monetary and
economic policy of Estonia in 1997 and 1998 was of utmost
importance.
From time to time the IMF has been reproached for the
unstable quality of its economic policy advice. At the same
time one tends to forget that the full responsibility for the
economic policy failures and crises lies in each country
itself. The IMF is often approached if the economic policy is
in a hopeless mess already. It has to be stressed that the
relations between the IMF and Estonia can be characterised by
the expression "political dialogue" where common
understanding is achieved by negotiations rather than a
dictate. This was the situation when the last memorandum of
economic policies was compiled and this will be the case in
the future.
Eesti Pank will definitely support the stronger than now
and more focused role of the IMF in anticipating and
preventing international crises. To that end the analyses of
global economic situation have to become more precise and the
results more transparent. Also, in co-operation with the
World Bank and other organisations the IMF should pay serious
attention to the stability of the financial sector.
***
Besides the Committee work, the representatives of Estonia
have scheduled a number of important meetings during their
Washington visit, e.g., with John Odling-Smee, Director of
European II Department of the IMF, Peter Keller, Head of
Estonia's Mission, and several other leading experts of the
IMF. A significant issue is the preparation of the IMF
Mission coming to Estonia at the end of April. The IMF and
World Bank are about to finish the Financial Sector
Assessment Programme of Estonia (FSAP). The final report
includes, inter alia, a detailed analysis of the activities
and a status report of the Estonian financial sector
supervisory authorities (Banking Supervision, Insurance
Supervisory Authority, Securities Inspectorate). The report
assesses the compliance of the activities of different
Estonian financial supervisory institutions with
international standards as well as the strengths and
weaknesses of the Estonian financial system. The FSAP final
report will evidently become the basic document in the
preparations for the establishment of the unified financial
supervision in Estonia.
***
In addition, the Estonian delegation agenda includes
meetings with T. Padoa-Schioppa, Executive Board Member of
the European Central Bank, and Jürgen Stark, Deputy Governor
of Deutsche Bundesbank. Economic and monetary policy issues
related to the enlargement of the European Union as well as
the role of central banks will be discussed here. The visit
also includes meetings with analysts of the leading rating
agencies.
