Within this area, the IMF has its main competence and can contribute most. At the same time, the world has changed a lot since the IMF was set up at Bretton Woods in the forties, and it is natural for the organisation to expand its involvement in financial issues and, in particular, with respect to how private flows of capital are to operate within a good regulatory framework. The annual meetings in Prague The coming annual meetings in Prague are to some extent a continuation of this discussion. In Prague, the ministers of finance and governors of central banks from the member countries will meet to discuss the IMF’s future agenda and share views on the work that has been done since the meetings in Washington in the spring. Most of the issues that I have mentioned will be taken up at these meetings. They will discuss trends in the world economy and future risks and opportunities. They will discuss the increased role of private flows of capital and how they affect the IMF’s provision of advice and loans. They will also discuss how the IMF can obtain a more constructive collaboration with private financiers. The experiences of standards within different areas will be analysed as well as the poorest countries’ debt situation, and not least how the debt relief is to be financed. BIS Review 78/2000  6  The IMF has accordingly a key role in what we somewhat carelessly call globalisation.
Bear in mind then that Sweden is an industrialised country. Many of the member states of the IMF are poor and have even in calm periods unemployment of around 30%, a very strained government budget and limited opportunities to obtain foreign finance. Financial stability is even more important in these countries. Activities to prevent crises A large part of the IMF’s activity centres around preventing crises arising. Globalisation has meant that this work has become increasingly important. Few people want to trade with a country that is insecure, and even fewer to lend money there. Since the flow of information is increasing and capital can swiftly be moved between countries, economic crises can arise more quickly in the event of indications of problems in a country. They can also become deeper and spread to regions farther away than previously. The value of a stable, long-term economic policy has therefore been reinforced. Briefly, the IMF’s preventive work involves spreading knowledge, giving advice and creating norms. Spreading knowledge means that the IMF continually monitors trends in the world economy, conducts research and spreads knowledge to national governments and the general public. Knowledge about where the economic risks are has a stabilising effect on markets and also allows countries to tackle their problems. The IMF continuously surveys economic trends in each member country and also gives regular advice on economic policy on issues concerning, for instance, exchange rates, inflation and the financial market. Most countries receive a visit from the IMF every year.