WASHINGTON, July 1 The International Monetary
Fund continues to be seen as a club for rich countries, limiting
how much other nations trust its advice as objective, the IMF's
own auditor said in a report on Tuesday.
The Independent Evaluation Office's report analyzed its own
studies over the past decade to see common patterns when the IMF
falls short. The IEO also criticized how well the IMF's
executive board oversees and guides the organization, a global
multilateral lender with 188 member countries.
The auditor found few cases of outright "asymmetric
treatment" and noted it was hard to measure what objectivity
means in practice. However, many of the IMF's members still
believed the lender treated its bigger shareholders, including
the United States and Europe, more leniently than others, it
The auditor found that IMF staff sometimes exercised
self-censorship to avoid candid messages about risks to advanced
economies - in contrast to their advice to smaller, poorer
That perception was magnified when the IMF lent billions of
dollars to euro zone countries in distress, including Greece,
Ireland and Portugal, with loans that were much larger than the
"The Euro Area programs had created the perception that
European member countries had excessive weight in the IMF's
decisions relative to their economic power," according to the
Developing nations have longed viewed the IMF with suspicion
for promoting disastrous privatizations that complicated the
transition from communism for some emerging nations in the early
1990s, and for pushing budget cuts that exacerbated debt crises
in Asia and Latin America a few years later.
That suspicion has been compounded by a power structure that
gives greater weight to many European countries compared to the
size of their economies. The IMF is based in Washington and is
traditionally headed by a European.
Reforms to the IMF's structure meant to give more power to
emerging markets have been held up by the Congress of the United
States, the IMF's biggest and most powerful member.
"Ultimately, the perception of lack of evenhandedness is
rooted in the uneven distribution of decision-making power
within the IMF," according to the IEO report.
The IEO also said the IMF's 24-member board sometimes does
not provide clear guidance or oversight of the IMF's strategic
direction, as board members are caught between acting on behalf
of the IMF or following the interests of the countries they
The auditor suggested the IMF should do a better job of
dealing with these persistent problems, instead of treating the
IEO's advice as a "box-ticking exercise" that does not get to
the heart of the problems.
The IMF's Managing Director Christine Lagarde said the IMF
takes seriously concerns about not treating all members equally,
and will continue to review this issue when designing its aid
(Reporting by Anna Yukhananov; Editing by Chizu Nomiyama)