If you go into a food shop today, you will find Swedish blood pudding as well as Italian salami, Chinese noodles, American peanut butter and coffee from Brazil. The same applies to most other types of goods. Increased trade also benefits the developing countries, which has been shown in various studies. Jeffrey Sachs and Andrew Warner at Harvard University have found that welfare in developing countries with an open trade policy has increased by 4.7% per year between 1970 and 1990, compared with 0.7% per year for those with closed borders. This means that a country can create more than six times as much welfare each year, just by deregulating its trade. No development assistance project in the world comes anywhere near such figures. The price for shutting oneself off from world trade is very high. Another important trend in recent years has been the deregulation of the international capital markets and the new information technology enabling savings capital to move in a second between different parts of the world, at almost zero cost. Capital is not really different from any other type of good. Some people need capital, and are willing to pay to borrow it. Others have savings and can sell the opportunity to use these for a period of time. Deregulation has meant that savings can to an increasing extent be channelled to where they will be most useful.
However, the IMF has become considerably more open in recent years, and today material on almost all activities is available, not least on the IMF’s website (www.imf.org). A second example is the issue of capital account liberalisation. Besides working for opening up the capital account in many countries, we strive for the long-term goal of giving the IMF a clearer mandate to regulate issues relating to the international capital market. A third issue where we have been active is developing a body of rules for how private creditors are to contribute to the financing of countries’ finance requirements in crisis situations. The increased attention in the media about the IMF and the World Bank has arisen during a period when the functioning of these organisations and their mandate have been discussed intensively internally as well. The growth of private capital markets has resulted in many countries no longer requiring financing from the IMF. At the same time, the need to build institutions, regulation and coordination is increasing, not least in the financial sphere. Some radical groups have argued that the IMF should be abolished, or considerably reduced in size. Others believe that the organisation should take on more responsibilities, such as within areas concerning the labour market, the environment and money laundering. Sweden is among those who believe that the IMF can only be an efficient organisation if its mandate is kept relatively narrow. The IMF shall work with financial stability, and in particular macroeconomic issues.