The IMF's objective and instruments The IMF's mandate is still valid in the main – in spite of the enormous changes that have taken place in the international financial system since the IMF was created. We still need an organisation with the task to foster trade, employment and growth by promoting international monetary cooperation as well as macroeconomic and financial stability. On the other hand, there is always reason to consider whether the Fund’s instruments to reach this overall objective should be modified. The IMF’s main instruments today are surveillance, lending and technical assistance. Allow me to say something about each of these. Surveillance The IMF's key instrument for reaching its overall objective should be its preventive activities, which are primarily carried out within the scope of its surveillance function. The IMF's primarily role is not to treat illnesses but to prevent them from breaking out. Much can be done to bolster the IMF's surveillance function, both as regards individual countries but also, to an increasing extent, by way of a stronger regional and global focus. This change in emphasis can, among other things, be motivated by the fact that globalisation and increased integration has resulted in a situation where more and more countries’ national policies give rise to externalities. A strong ‘multilateral’ surveillance function could contribute, more clearly than today, to creating a broad international discussion of global imbalances, incorrectly valued exchange rates, etc., which generate risks to stability both in individual countries and in the international financial system as a whole.
The problems are not a consequence of shortcomings in the borrowing instruments. I do not see any immediate need for new types of lending instruments, such as non-borrowing programs or a reintroduction of Contingency Credit Lines. There are already surveillance methods in place to deal with such situations, and today's borrowing instruments are sufficiently flexible to meet the existing requirements (and demand). Nor do I believe that the problems to any great extent are due to incorrect analysis or erroneous assessments, even though the situations faced by the Fund are often difficult and the advice given has been open to question from time to time. Nonetheless, there are a number of things that can be done in this area. Shortcomings still exist, as I mentioned earlier, as regards the Fund's participation in crisis resolution. There is scope for further development of those instruments that exist today. The reason why this has not happened is because some countries oppose it for political reasons. This brings me into the role that “political considerations” play for the IMF to work well. In my view, the central problems of the IMF are often political in nature. These problems exist at several different levels: •  Individual countries are sometimes for political reasons not willing to take the sometimes bitter medicine prescribed by the IMF’s staff and Executive Board and engage in serious dialogue.