Social Dimensions of the IMF's Policy Dialogue


The work of the IMF has major implications for the three core issues of the World Summit on Social Development (WSSD)--poverty alleviation, promotion of employment, and social integration.1 The IMF's policy advice to member countries aims at promoting international monetary cooperation, trade, and exchange rate stability and emphasizes the importance of sound economic policies to foster sustainable growth and generate employment. As economic and social developments are mutually reinforcing, these policies are essential for reducing poverty and engendering social integration in the medium term. At the same time, the IMF also recognizes the importance of sound social policies aimed directly at achieving social objectives.

This pamphlet focuses on only one aspect of the IMF's work, namely, its--mainly indirect and limited--role in social policy advice. First, the evolution of the IMF's involvement in social issues is traced. The lessons that can be drawn from this experience, including the policy implications, are then dealt with. This is followed by an elaboration of the social dimensions of IMF policy advice to member countries under its two major activities: surveillance of economic policies and financial support for adjustment programs. The next section discusses how the IMF's technical assistance has addressed social concerns, especially in the context of IMF-supported adjustment programs. The IMF's collaboration on social issues with the World Bank and UN agencies is then examined, and the pamphlet concludes by laying out ways to further strengthen the IMF's contribution to social development.

1 Social integration--as defined in UN documents for the Social Summit--concerns the ability of different groups in society to live together in productive and cooperative harmony and to accommodate differences within a framework of common interest to the benefit of all. Social integration implies justice for the individual and harmony among different social groups and countries. It means integration of disadvantaged and vulnerable groups by making all institutions of society more accessible to them.