"January 2001, Vol. 3"
Providing economics training to officials of IMF member countries and IMF staff the imf institute January 2001•vol. 3 courier Vienna Conference Focuses on Challenges to Completing Transition Pamela Bradley and Roger Nord o n November 5–7, the Öster- reichische Nationalbank (OeNB) held its seventh annual East-West Confer- ence, this year with the Joint Vienna Institute (JVI) as a cosponsor. Entitled Completing Transition: The Main Challenges, the conference drew about 370 participants from ministries and central banks of 36 countries, as well as from the academia and international financial organizations. Horst Köhler, Managing Director of the IMF, delivers the keynote speech at the conference gala dinner. See page 16 Managing National Economies in Time of Globalization Samir El-Khouri The seminar sought to raise awareness among o policymakers about the benefits and costs of n November 18–19, senior officials globalization, the domestic policy adjustments from Arab countries, Pakistan, and needed in face of globalization, and the lessons Turkey attended a high-level seminar learned from country experiences worldwide. In in Abu Dhabi, United Arab Emirates, addition to ministers, governors, and other on globalization and economic policy- senior officials who attended the seminar, AMF making for countries in the region. The seminar management and staff, IMF Executive Directors was organized by the IMF Institute and the Eco- and senior staff, World Bank staff, academics, nomic Policy Institute (EPI) of the Arab Monetary and representatives from private financial insti- Fund (AMF) as part of the joint Regional Train- tutions also attended. ing Program (RTP). See page 18 also in this issue... The Debate on the Interview with Economic Training IMF Institute at IMF and the Stanley Black Aids Country the JVI International Farah Ebrahimi Ownership of Angel Antonaya Financial Architecture Page 5 Programs Page 10 Alicia Jiménez Leonardo Hernández Page 3 Page 7 from the director t his year was a busy and successful one for the IMF Institute as we worked to fulfill our twofold mission: training country officials and Fund economists. At headquarters we orga- nized 23 courses and seminars for country officials of which we conducted 17, reaching near our physical capacity in Washington. Overseas, we organized 79 training events of which we conducted 47—the majority through the regional training partnerships in Abid- jan, Abu Dhabi, China, Singapore, and Vienna. The new courses on finance and banking, designed mostly in 1999, moved onstream as part of the regular curriculum at headquarters and overseas. And the international network of regional training centers became truly worldwide with the opening of the Joint China-IMF Training Program in June and the recent agreement between the IMF and the Government of Brazil on the formation of a regional training center in Brasilia. Finally, in 2000 our distance learning program became operational, with the first course, on financial pro- gramming and policies, conducted in January for 50 officials from nearly 50 countries. Internal economics training also had a busy year. We held 24 courses and 46 seminars, bringing the average number of economics training in the Fund to 2.9 days, from 1.2 just two years ago. To help conduct these events, we brought internationally recognized scholars to teach or coordinate the courses and seminars. Sev- enty-three speakers from a broad range of universities and research institutions lectured in internal eco- nomics courses in 2000. And for the first time, we invited a small number of country officials to partici- pate in selected internal economics courses as well— an experiment that proved highly successful, not only in what it provided the country officials, but also in the added experience officials brought to these sessions. Finally, we reached a new high in our research output. Institute economists produced 32 working papers, with many more near completion, on a broad array of topics of importance to the Fund. Thus, 2000 was the year in which many of the initiatives that we had undertaken over the past several years came to fruition, bringing us to a new level in all of the core areas of our training strategy: expanding overseas training, strengthening internal economics training, expanding and diversifying our curriculum to make it more responsive to the needs of country officials and Fund staff, and increasing the global reach of training through distance learning and technology. As the articles in this issue of the Courier show, 2000 has been busy indeed, but it has been a rewarding year for all of us here at the Institute. Mohsin S. Khan Director, IMF Institute ORDERING INFORMATION: CREDITS The IMF Institute Courier is published semi-annually by the International Monetary Fund. It is distributed to Editor: Farah Ebrahimi former participants, participant sponsors, and member Editorial Assistant: Myrna Bas government agencies and institutions throughout the world at no charge. Address all correspondence to: Design: Luisa Menjivar-Macdonald Carolyn Ragland Illustration: Massoud Etemadi Deputy Division Chief Composition: Julio R. Prego Administrative Division IMF Institute, Room IS2-1300, Photography: Denio Zara, Padraic Hughes, International Monetary Fund,Washington, D.C. 20431, Pedro Marquez, and Michael Spilotro. U.S.A. The Debate on the IMFand the International Financial Architecture Alicia Jiménez this rate should be charged only during nor- mal periods, not crisis periods. If higher rates, At an October 25 seminar at the IMF Institute, such as SRF rates, were to be applied to all Morris Goldstein, Senior Fellow at the Insti- nonconcessional Fund loans, Goldstein tute for International Economics, spoke on the argued, the main effect would be on the speed main findings and recommendations of several at which countries repay the Fund, not on the recent reports on the new international finan- amounts they borrow. “The decision to go to cial architecture and reform of the IMF. He the Fund is fairly price-inelastic,” he said. focused in particular on the contrasting views Critics of the Fund also argue that the of the Meltzer Commission Report, the Council maturity and repayment periods of IMF loans on Foreign Relations Report, and the U.S. are too long. The Meltzer Commission, for Treasury Report as they pertained to the lend- instance, cited 24 member countries that have ing policies and practices of the Fund: specifi- been in debt to the Fund in 30 of the past 50 cally, the interest rates and maturity on IMF years and 46 countries that have been in debt loans, the size of IMF lending packages, and for 20 years or more. It proposed reducing the IMF conditionality. repayment period to 120 days, with one allow- able rollover for a maximum of 240 days. IMF interest rates and loan maturity On the other hand, the U.S. Treasury char- Goldstein recalled the famous Bahegot prin- acterized the Meltzer Report’s position on IMF ciple that a lender of last resort should lend at loan maturity as unrealistic, noting that in the penalty rates. If interest rates are too low, bor- majority of cases, countries need much longer rowers will take excessive risks. With that than four months to be in condition to repay principle in mind, some IMF critics argue that the Fund. In Goldstein’s view, the prolonged the IMF loan rates are too low, providing an use of Fund resources poses a problem, which unwarranted subsidy that promotes excessive needs to be addressed by shortening moder- borrowing and moral hazard. The IMF took ately the repayment period. account of this criticism when it created the Supplemental Reserve Facility (SRF), which Size of loans charges higher inter- Normal access limits on IMF loans are 100 est rates, but percent of a country’s quota annually and 300 Goldstein cau- percent cumulatively. The IMF maintains that tioned that different criteria, not the size of quotas, should be used to evaluate meeting those conditions the size of rescue packages. “Asking for too would reduce the risk of get- The main concern about the many structural ting into crisis, it would not size of some recent packages conditions could be sufficient to deter a crisis. is that they contribute to The scope of conditionality, moral hazard on the lender result in poor crisis noted Goldstein, is a very con- side. A number of reports management, tentious issue. The criticism have called for smaller res- damage the Fund’s against intrusiveness covers cue packages. Although they two aspects—the range of poli- recognize that moral hazard overall reputation cies and “micromanagement.” is a problem with all insur- for sound analysis Other critics charge that many ance arrangements, critics conditions fall outside the argue that the solution is to and advice, and Fund’s core competence, reduce the amount of pay- run counter to a which is basically in the areas ment (through coinsurance sensible division of of monetary, exchange rate, or deductibles, for example) and financial-sector policies. or price the insurance more labor with the Asking for too many structural appropriately (by charging other international conditions could result in poor higher insurance rates for crisis management, damage more risky policyholders), or financial the Fund’s overall reputation both. institutions” for sound analysis and advice, and run counter to a sensible IMF policy conditionality division of labor with the other international Another Bagehot guideline for a lender of financial institutions. last resort is that lending should be done on In discussing the currency-regime aspect of good collateral that has market value and Fund conditionality, Goldstein asserted that that safeguards the solvency of the lender. among larger emerging economies with rela- However, the IMF does not lend to countries tively open capital markets, only two have against collateral; rather, it lends to coun- been able to maintain a fixed exchange rate tries that have balance of payments needs for five years or longer: Argentina and Hong under “adequate safeguards.” These safe- Kong. The main lesson from numerous experi- guards take the form of the “conditions” or ences is that in most cases the best currency policy actions that a country agrees to prescription is to stay in a “corner,” either a undertake to qualify for the loans. The managed float (with an inflation-targeting reform debate has focused mainly on four regime) or a “hard peg” (a currency board or issues related to IMF conditionality: (1) ex dollarization). This view is shared by the IMF. post policy conditionality versus ex ante con- Finally, Goldstein said that fear of floating ditionality (prequalification based on some is fairly widespread among emerging coun- structural conditions); (2) scope and intru- tries, mainly because of large currency mis- siveness of policy conditionality; (3) currency matches. If there are large unhedged dollar regime and burden-sharing aspects of condi- liabilities, depreciation can cause significant tionality; and (4) implementation of interna- costs for the banking and corporate sectors. tional financial standards. Goldstein asserts that the best solution is to On the issue of ex post versus ex ante condi- reduce the mismatches and to have a man- tionality, the Meltzer report argues that the aged float regime. If this is not possible, then Fund’s (ex post) policy conditionality “has made dollarization could be the next best solution. IMF programs unwieldy, highly conflictive, time In the end, it all will depend on the “experi- consuming to negotiate, and often ineffectual.” ment” going on in Latin America. If Brazil and It recommends that countries who want to bor- Mexico succeed with managed floating and row from the Fund meet requirements mainly inflation targeting regimes, then many larger on banking policy and data disclosure. Others countries in the developing world will follow. assert that preconditions do not prevent finan- However, if Argentina is able to overcome its cial crises or achieve the balance of payments current difficulties and show good results adjustment necessary to restore countries’ abil- with its hard peg regime, and the other coun- ity to repay the Fund. Goldstein remarked that tries fail with their floating exchange rate enforcing preconditions is not the best way to regimes, countries will opt more readily for ✒ qualify countries for IMF assistance. Although dollarization. 4 Interview with Stanley Black Farah Ebrahimi a s part of its resident lecturers pro- gram the IMF Institute regularly invites noted economic scholars to teach and conduct research at the Institute. (See article by Roberto Garcia-Saltos in this issue.) A current visiting scholar is Professor Stanley Black, who joined the Institute in July 2000 on a one-year assign- ment as Senior Policy Advisor. Professor Black received his Ph. D. in economics from Yale Uni- versity and was assistant professor of eco- nomics at Princeton University and professor of economics at Vanderbilt University and the Uni- versity of North Carolina, where he is currently Georges Lurcy Professor of Economics. He has served in government with the President’s Council of Economic Advisors, the Federal Reserve Board, and the Department of State and visited at numerous universities and research institutions. Farah Ebrahimi inter- viewed Professor Black for the Courier. EBRAHIMI: You have had a distinguished record as professor, scholar, and economic Stanley Black, Senior Policy Advisor at the IMF Institute. advisor, having taught or conducted research in some of the most prestigious universities was to avoid running out of foreign exchange. and research institutions here and abroad. As The authorities responded by restricting an aside, you were also the doctoral thesis access to the foreign exchange market, which advisor for James Heckman, this year’s win- meant that the Korean won became basically ner of the Nobel Prize in Economics. You bring inconvertible because it was impossible to buy to the Institute a wealth of experience. Would dollars. This event seems to have led to a sig- you tell our readers about your recent nificant shift in the demand for money in research? Korea and created a serious policy problem, BLACK: My research interests run along which was only resolved by letting the two lines. The first focuses on the technical exchange rate fluctuate more freely. problems of exchange rate behavior and I have also been working on issues of tran- issues relating to foreign exchange markets; sition. This work grew from a project I did for the second, which is related to the first but is USAID on Mongolia about two years ago. The broader, concerns how macroeconomic prob- project studied the constraints on Mongolia’s lems interrelate with exchange rate regimes economic growth as it attempted to shift from and monetary and fiscal policies of countries a centrally planned to a market economy. My facing macroeconomic instability. focus was on the shortcomings of the financial I am particularly interested in what hap- system, although the model I developed also pens when a country switches from a pegged dealt with the whole nonagricultural economy. exchange rate to a floating exchange rate at a The country faced severe problems: many time of crisis. For example, when in late 1997 state-owned banks with bad assets, a rickety Korea switched from a quasi-pegged exchange payments system that relied primarily on cash rate to a more floating exchange rate (this transactions, mismanaged state enterprises, occurred in the context of an IMF agreement), and outmoded infrastructure in desperate the Korean authorities were confronted with need of modernization. My paper attempts to two constraints. One was to minimize the rate quantify the gains in productivity that might of change of the exchange rate and the other accrue if some of these areas are reformed. 5 I am also working on a survey of work on For example, the experiences of the Asian crisis the portfolio theory of the exchange rate, and other related problems have made finan- which explains exchange rate movements by cial stability a new area of emphasis for the the demand and supply of financial assets. Fund. Because we have staff whose research Although a number of alternative exchange interests focus on these issues, we were able to rate models have battled for recognition, none quickly modify some of our courses to include has succeeded. But there seems to be a revival modules on financial stability and design new of interest in the portfolio approach recently, courses on financial sector issues. so I am surveying some of the work that has EBRAHIMI: How is the research program used this method, as well as pursuing my own organized? How do staff pick their topics? work in this area, looking at the dollar- BLACK: There are no hard and fast rules, deutsche mark and dollar-euro relationship. which may account for the wide range of Relatedly, I supervise the research of my research going on at the Institute. Being in graduate students, and much of their work the Fund, of course, automatically brings cer- bears directly on issues of interest to the tain issues to the fore, and individuals’ spe- Fund—for example, the sustainability of the cialization, intellectual curiosity, and current account balance positions in Central experience further influence their choices. European countries, such as Hungary and The research, however, tends to be more Poland; the credibility of the exchange rate- policy oriented, concerned more with immedi- based stabilization program in Mexico; the ate applicability and relevance than abstrac- collapse of the European monetary system tion. That is probably the key difference some years ago, and so on. between the research program I see here and Thus, my own research and that of my stu- the research programs I am familiar with in dents overlaps with projects that people at the the university setting. Fund are working on. EBRAHIMI: Is any of the research being EBRAHIMI: Over the past two years, the done collaboratively, for example, with staff Institute has expanded its research program, from other Fund departments or outside making it an important and integral part of its scholars? teaching program. You are the second senior BLACK: There are collaborative projects policy advisor at the Institute, the first being going on outside the department, for example Peter Montiel, who is now back at Williams with short-term visitors who have come to the College. Could you tell us about the status of Institute at the behest of a particular staff this program? member to work with him or her, or collabora- BLACK: The program I see is very dynamic. tive efforts with Fund staff in other depart- I have certainly been surprised by the level of ments. We are trying as well to provide more work that has been done and the number of interaction among staff across divisions to papers being completed. As of fall 2000, staff encourage them to work more collaboratively. were nearing completion on 42 papers, cover- EBRAHIMI: What is your role as senior pol- ing a truly wide range of topics—from macro- icy advisor in shaping the research program? and microeconomics, to international trade BLACK: The Institute conducts a biweekly and factor movements, finance and debt, seminar series, which I help organize. These financial economics, fiscal policy, development seminars are open to Fund and World Bank and policy reform, and transition economics. economists and provide a forum for Institute The staff are committed to teaching, but staff to present their research papers and to they also value research because it enables receive feedback from colleagues. I also meet them to develop their professional identities with individual researchers on their projects and to gain expertise in areas that may be and review applications for visiting scholars’ related to their teaching, either currently or in positions. the future. And because staff are encouraged Mostly, my goal is to encourage the staff’s to conduct research, we are able to draw a research activities and to help create an envi- higher quality of economists to the Institute. ronment that allows them to engage in EBRAHIMI: How has the program affected research. And since I have spent my life doing the course contents and the quality of the this for graduate students and junior faculty, teaching? the work feels very familiar. BLACK: Despite the short time I have been EBRAHIMI: Do you also have a role in the here, I can see examples of how research is Internal Economics Program—the training helping to strengthen the Institute’s courses. program for Fund staff? 6 BLACK: When asked, I advise the training available tools in whatever area they are section on the speakers and topics for courses asked to work in. being planned. For example, we are currently EBRAHIMI: How does the research program discussing next year’s program and one issue at the Institute differ from or complement the that has come up is the need for more inter- research done elsewhere in the Fund, for nal training courses on financial sector prob- example, in the Research Department? lems. For example, Fund staff, in conjunction BLACK: The Research Department is the with World Bank staff, are being sent on mis- locus of the research efforts of the Fund. The sions to conduct Financial Sector Assessment Institute has a teaching mission, and to have Programs (FSAPs). These assessments evalu- effective teachers and an effective teaching ate whether a country has an effective pro- program requires a staff that is aware of cur- gram for supervising its financial institutions. rent research issues, that is aware of current And the evidence is that quite a number of policy issues, and that is in its own way trying countries, most often transition economies but to grapple with those problems on a profes- others as well, are seriously lacking in this sional level. That is the purpose of the area. We want to make sure that Fund staff research effort in the Institute. It helps have all the tools they need to make their strengthen the teaching enterprise by helping evaluations. Internal training courses are one us attract the best staff we can to teach and way to help staff acquire the right tools. That by keeping them current on the issues. I am is the purpose of the internal training pro- pleased to be able to contribute to this pro- ✒ gram: to help equip Fund staff with the best cess while I am here. Economic Training Aids Country Ownership of Programs Leonardo Hernández ship the link between training in financial a programming and the design of adjustment mong the many lessons learned programs has become even more important. from the recent international In response, the Institute has introduced two financial crises, an old one has initiatives. gained renewed attention: the First, it has developed a new two-week importance of country ownership course on financial programming—to begin in for the success of any Fund-supported pro- 2001—aimed at training country officials to gram. As a result, improving country owner- develop a comprehensive financial program. ship is now high on the IMF’s reform agenda. The course is designed to provide a unique, This means greater emphasis on country par- hands-on experience in diagnosing economic ticipation, both in the analysis of policy problems, formulating policies, and simulating options and in the design of adjustment pro- policy outcomes. It differs from the eight-week grams. Although IMF Institute training has course offered at headquarters—and from the traditionally been designed to assist member current two-week course given abroad—in that countries in both of these areas, with the it emphasizes the hands-on exercise rather Fund’s renewed emphasis on program owner- than the discussion of related policy issues. 7 A typical course begins with short lectures ent language and economic skills of the atten- on basic macroeconomic concepts and dees, thus encouraging more active participa- accounting principles, with the balance of the tion by all. In this way, the new courses time dedicated to workshops in which small provide not only more effective training, but groups of about 8 to 10 people analyze and they also train more officials from the selected forecast the real, fiscal, monetary, and exter- countries, helping to build a critical mass of nal sectors of a particular economy. Based on expertise in countries where it is most needed. their findings, participants next establish Finally, the courses bring together groups of appropriate objectives and develop a compre- officials from different agencies in the same hensive adjustment program aimed at achiev- country, thereby making it easier for countries ing those objectives. The exercise is based on negotiating with the Fund to put together a actual country data, and as in real life, partic- team to produce a feasible and agreeable ipants are required to make policy decisions adjustment program. with limited information at several stages dur- A recent course specially tailored to the ing the design of the economic program. By needs of four developing countries in Asia— working in small groups, participants are Cambodia, Lao P.D.R., Myanmar, and Viet- encouraged to become directly involved in nam—was conducted at the IMF-Singapore developing the adjustment program and to Regional Training Institute in August 2000. develop a sense of team work. The latter is an Overall, participants expressed great satisfac- important objective of the courses, since tion with the new format. They noted that the preparing an adjustment program is a team small and more homogeneous group of coun- effort requiring the expertise of officials from tries made it easier for participants to express different government agencies. their views and to discuss issues of particular The second initiative consists of new relevance to their economies. National courses regional courses for participants from small have also been offered in Vietnam and Cam- groups of countries, especially from those bodia and are planned for Lao P.D.R and where the need for training is greatest. Mongolia in the near future. Similarly, a new Because these courses target a few countries regional course specially designed for the with similar economic conditions, they allow small Caribbean economies was offered in discussions to focus on issues of direct rele- Barbados during the second half of 2000 (see vance to participants. They also lower the article by Da Costa and De Masi in this ✒ communication barriers imposed by the differ- issue). IMF Report on Training 1998–99 An in-depth report on the IMF’s economic training activities for country officials at head- quarters and overseas and its training activi- ties for Fund staff for the two-year period 1998–99. TO ORDER: Send e-mail to email@example.com. You can also download the report from the IMF Institute website: www.imf.org, go to “about the IMF,” click on “IMF Institute” under Technical Assistance. 8 Joint China-IMF Training Program in Full Swing Donogh McDonald that emerge from international experience and their relevance for China. The course covered the development and monitoring of he Joint China-IMF Training the foreign exchange market, the lessons Program is off to a strong start. from the emerging market crises for choos- As noted in the June issue of ing an exchange regime, global trends in the Courier, the program was foreign exchange markets, international established by the IMF and the experiences with central bank intervention, Peoples Bank of China to provide training to and the links between external sector liber- Chinese officials involved in formulating and alization and financial sector stability. implementing economic and financial policies • International Accounting Standards for and compiling and analyzing statistics. The Financial Institutions. MAE conducted this first five training events were held between four-day course in Hangzhou in October. June and December 2000, attended by more The course covered topics such as bank than 200 Chinese officials. The specific events financial statements, internal control sys- were as follows: tems, and accounting and controls for spe- • Macroeconomic Impact of the Budget and cific aspects of bank operations, such as Current Issues in Tax Policy. The Institute deposits, investment and trading opera- held this two-week course in Suzhou in tions, lending, and transactions with June. The course addressed fiscal issues affiliates. related to economic growth, macroeconomic In delivering the courses, the Fund teams stability, and income distribution. Lectures drew on a number of outside experts, includ- covered the main principles of fiscal reform, ing officials from various agencies in China, expenditure and revenue policy, and fiscal the Central Bank of Chile, the Central Bank of forecasting, emphasizing interrelationships Finland, and the U.S. Federal Reserve. between public finances and other sectors. For 2001, seven events are planned. In Workshops allowed participants to discuss addition to a high-level seminar on reforming these principles in smaller groups and to and opening china’s banking sector, the event apply them in practical exercises. will focus on money and banking statistics, • Financial Programming and Policies. The monetary operations, bank supervision, finan- Institute conducted this two-week course in cial programming and policies, and foreign Shanghai in August. The course addressed ✒ exchange operations. the key methodological topics related to accounting, analysis, and forecasting in the main areas of macroeconomic policy. It cov- ered issues related to capital flows and to reforms in the financial, state enterprise, and external sectors and discussed recent economic developments in China. It con- cluded with a financial programming exer- cise using China as a case study. • Macroeconomic Statistics for Users. The IMF’s Statistics Department held this three- day high-level seminar in Chongqing in August. The seminar focused on the use of macroeconomic statistics in the analysis and formulation of policy, highlighting in particular the role of sound statistical frameworks and the statistical links among different economic sectors. • Foreign Exchange Market and Operations. The IMF’s Monetary and Exchange Affairs Department (MAE) delivered this one-week course, which highlighted the best practices 9 IMF Institute JVI: at the Keeping Up with Transition Countries Angel Antonaya course had to be supplemented by shorter a seminars to address the needs of officials look at the IMF Institute’s cur- directly involved in the formulation and imple- riculum at the Joint Vienna Insti- mentation of economic policies. So in 1998 tute (JVI) since 1992 shows a the IMF Institute started to diversify its offer- steadily expanding program that ings at the JVI. It added a three-week seminar has been continually fine-tuned to on trade and exchange rate policies, particu- meet the needs of officials from transition larly as they relate to economic adjustment countries. More important, it shows the grow- and structural reform. The same year, it ing sophistication of transition economies with added another regional course to its curricu- market theories and policies. While in 1992 lum: Techniques of Financial Analysis and courses focused primarily on introducing offi- Policy, targeted to officials with little exposure cials to basic market concepts and mecha- to market economics and limited time to be nisms, they now provide a rich array of short away from work. and long courses tailored for officials at differ- Despite the success of these courses, a gap ent levels and on such issues as trade and was apparent in the curriculum: the Institute exchange rate policies, external debt, financial needed to add courses to meet the needs of sector instruments, and the like. the growing number of participants with Until 1998, the Institute’s flagship course advanced knowledge of market economics. was Macroeconomic and Analysis Policy These officials needed training on specific (MAP)—a nine week comprehensive survey of policy issues and opportunity for dialogue macroeconomic analytical concepts and tech- and for sharing country experiences. In niques, making it the longest course at the response, the Institute developed a new high- JVI. Because of high demand for the course, level seminar on macroeconomic manage- the IMF Institute offered it three times a year. ment, which was offered twice in 1999. The But as transition economies’ exposure to mar- seminar’s core was a set of lectures on ket economics increased, the course under- advanced policy issues, including fiscal, went changes as well. The section on basic exchange rate, monetary, external debt, economic concepts was dropped, the macro- financial sector reform, and trade. The economic section was updated, and the course concluded with a short financial pro- course shortened to five weeks and offered gramming application. After the first offering, twice a year instead of three. As with the the course developers used participant sug- longer course, it remained very popular with gestions to fine-tune the course. They public officials in transition countries. dropped the section on financial program- As the transformation process progressed a ming, since most of the participants had more diverse group of transition countries already been exposed to it through the MAP emerged, with some economies growing faster course, replacing it with a series of presenta- than others. This diversification was reflected tions by participants on issues specific to in the composition and backgrounds of the their respective countries. This twofold participants as well. While some participants change—less focus on financial programming still struggled with basic macroeconomic con- and more emphasis on sharing country expe- cepts, others were applying them regularly in riences became a feature of some of the other their work. It became clear that the MAP seminars as well. 10 The year 2000 witnessed the consolidation instruments, helping participants understand of these seminars and the introduction of a the conceptual basis of the new instruments, new seminar on financial markets and new as well as how financial entities use them in financial instruments. The new curriculum risk management. reflected the importance of financial interme- As more officials receive formal training in diation and financial markets in transition market economics, demand for advanced economies. It also reflected the growing training will increase, as it has been steadily sophistication of the financial sector in a over the past several years. The Institute has number of transition economies. The first been responding to this growing demand, not offering of the course aimed at mid- to senior- only with a diverse set of courses and semi- level officials in central banks and ministries nars at the JVI, but also with national of finance. The course gave special attention courses conducted in select transition coun- ✒ to the emergence of derivative markets and tries, such as Estonia in 2000. Visiting Scholars Broaden the Institute’s Research and Teaching Roberto García-Saltos market development, and financial deriva- tives, just to mention a few. (See box.) During her stay at the Institute, for exam- i n 1997 the IMF Institute established a Visiting Lecturers Program to bring ple, Magda Kandil of the University of Wiscon- prominent academics and policy experts sin-Milwaukee has issued three working to the Institute to teach and conduct papers on cost of living adjustment and busi- research for periods ranging from one ness cycles, wage flexibility and economic per- week to several months. Since then, many formance, and the asymmetric effects of scholars have visited the Institute, collaborat- exchange rate fluctuations. She has also lec- ing with staff economists on research projects tured in the Macroeconomic Management and and bringing their special expertise to course Policies course at headquarters. She is cur- lectures. The result is a richer menu of topics rently working on a study of demand-side sta- taught in Institute courses and a more varied bilization policies, which explores the effects research output. of the variability of fiscal and monetary While at the Institute, visiting scholars have shocks on inflation and growth in the United worked on such topics as exchange rate States. arrangements, capital controls, linkages Leonardo Auernheimer of Texas A&M Uni- between banking and currency crises, bank- versity worked with Institute economists on ing crisis management, money and capital two separate research projects. The first, with 11 Visiting Scholars During 2000 Name Affiliation Topics Leonardo Auernheimer Texas A&M University External borrowing conditions and the transmission of shocks; interest rate defense against speculative attack Michael Binder University of Maryland Econometric evidence on purchasing power parity Stanley Black University of North Carolina Growth in transition economies; exchange rate problems Luis Carranza Banco Continental and Economic growth and imperfect credit Pontificia Universidad markets Catolica del Peru Louis Chete Nigerian Institute of Social Current account sustainability: and Economic Research evidence from Nigeria Ehsan Choudri Carleton University International trade and productivity growth; patterns of trade in OECD countries Tomas Cosimano University of Notre Dame Monetary policy and bank capital regulations Andrew Feltenstein Virginia Polytechnic Institute Sequencing of reforms Kabir Hassan University of New Orleans Econometric tests on Bangladesh’s capital market Magda Kandil University of Wisconsin Cost of living adjustment; wage flexibility and economic performance; exchange rate fluctuations; fiscal and monetary shock effects on inflation and growth in the United States Mahmood Khan Simon Fraser University Rural poverty Kala Krishna Pennsylvania State University Transferability versus nontransferability with endogenous investment choice François Leroux Ecole des Hautes Etudes International capital markets; banking Commerciales soundness, banking and currency crises Meher Manzur Curtin University of Empirical evidence of real interest rate Technology parity Peter Montiel Williams College Policy response to volatile capital flows Sergio Rebelo Northwestern University Capital controls and economic reforms Roberto Steiner Universidad de los Andes Depositor behavior and market discipline in Colombia Clas Wihlborg University of Goteborg Econometric evidence on insolvency proce- dures and capital structure Susan George, analyzed the effects of using economist, completed their study of deposit interest rates to defend a currency from spec- behavior and market discipline in Colombia. ulative attack. The second, with Roberto Gar- The study presents evidence that during cía-Saltos, studied international debt and the 1985–99 bank depositors were able to discrim- price of domestic assets, examining the role of inate between sound and unsound banks. physical capital as collateral for loans in mag- Since November, Tomas Cosimano of the nifying the effects of shocks. University of Notre Dame and Ralph Chami, Roberto Steiner of Universidad de Los Andes from the Institute, have been working on a in Colombia and Adolfo Barajas, Institute study of monetary policy under the Basel 12 Accord. The study explains why monetary pol- ented work of Institute economists, thus fur- icy changes can affect banks’ total capital and ther enhancing the effectiveness of the Insti- influence the resources available to fund bank tute as a training center for government loans. Finally, Sergio Rebelo of Northwestern officials. But the gain is not the Institute’s University and Institute economist Danyang alone. The scholars benefit in turn through Xie are working on a theoretical model to eval- their interactions with course participants, uate the effects of the imposition of temporary many of whom are experienced country offi- tariffs or capital controls on countries that cials directly involved in formulating and have implemented trade reforms and liberal- implementing economic policies in their coun- ized capital flows. tries. They also benefit from feedback from In sum, the Institute’s Visiting Lecturers Fund economists, which helps improve the Program is helping to link the special exper- quality of their research and enlarges the ✒ tise of academic scholars with the policy-ori- audience for their work. The IMF Institute Contributes to the Caribbean Initiative Mercedes Da Costa and The course was distinctive in two ways. First, it was offered as part of the Western Paula De Masi Hemisphere Department’s broader agenda to n August, the IMF Institute conducted a expand relations with the Caribbean coun- i two-week regional Financial Programming tries. Known as the Caribbean Initiative, the Course in Bridgetown, Barbados for 24 agenda includes efforts to coordinate the mid-level officials from seven Caribbean provision of technical assistance in the region, countries and two regional institutions: establish a regional seminar program, the Caribbean Development Bank and the increase the Fund’s research work on Caribbean Center for Monetary Studies. The Caribbean problems, and improve regional course was organized in coordination with the surveillance. Western Hemisphere Department, with on-site Many of the IMF team’s core lectures technical and administrative support provided addressed the specific policy issues and chal- by the Central Bank of Barbados. lenges facing Caribbean countries: for exam- From left to right: Mercedes Da Costa (IMF Institute), Marion Williams, Governor of the Central Bank of Barba- dos, Edda Zoli (IMF Institute), and Paula De Masi (Western Hemisphere Department). 13 ple, progress with fiscal reforms, trade liberal- policymaking. As in all regional courses, dur- ization, financial sector reform, exchange rate ing the final two days of the course partici- arrangements for island economies, and the pants conducted a hands-on exercise to pros and cons of dollarization in the region. prepare a financial program. Some of the special topics were covered by The second distinctive feature of the course guest lecturers from the Central Bank of Bar- was the all-woman composition of the mission bados and the Ministry of Foreign Affairs. team, whose members were Mercedes Da Among the issues discussed were trade agree- Costa (IMF Institute), head of the mission; ments in the region, particularly with the Edda Zoli (IMF Institute); and Paula De Masi European Union (EU), and the challenges (Western Hemisphere Department). In addi- ahead in light of complaints before the World tion, the course was hosted by Marion Trade Organization on preferential treatment Williams, Governor of the Central Bank of and the approaching expiration of the current Barbados, who is one of the few women cen- agreement with the EU. Lectures also focused tral bank governors in the world. Dr. Williams on bank supervision and regulation, including has worked at the Central Bank of Barbados the benefits and risks of off-shore banking for over 20 years and has conducted studies and the international pressure to further reg- on financial management, banking sector ulate those activities and to apply a uniform reform, capital market developments, housing tax on them. Finally, the adviser to the Gover- and mortgage market development, and nor of the Central Bank of Barbados dis- employment generation. cussed the kind of economic problems that It is safe to say that although an all-woman small islands—particularly those with a nar- mission hosted by a woman central bank gov- row economic base—are likely to face in a ernor is a rarity now, it will not be so in the ✒ world of increasing globalization and the near future. implications of these problems for economic Participants Bring Experiences and Knowledge to IMF Courses Allan Brunner exchanges in workshops whose small settings p encourage the sharing of experiences, and in articipants bring a unique set of particular, through their formal presentations. experiences and knowledge to Insti- The latter, which typically focus on country tute courses. They are often govern- experiences and area-specific knowledge, pro- ment officials with in-depth vide a wealth of information, not only for knowledge of their countries and other participants, but also for Institute lec- substantial hands-on experience in the for- turers, who often incorporate the relevant seg- mulation and implementation of economic ments into their subsequent lectures. policy. Moreover, many of them have expertise The accompanying table contains a partial in specific areas—such as privatization of list of presentations made by participants in state-owned enterprises, bank regulation, or selected courses at headquarters and overseas financial market development—which comple- during 2000. The list of topics is noteworthy in ments that of Institute lecturers. The perspec- two respects: first, the topics touch on the tives they provide on culture, institutions, and most important issues in today’s economic history allow greater insights into understand- debates, and second they provide a recounting ing the “intangibles” that must be considered of actual experiences of a wide range of coun- in the design and implementation of economic tries, from Asia and Latin America to Africa adjustment programs and structural reforms and transition economies. In her presentation and the responses needed to deal with finan- on Malaysia’s adjustment experience during cial crises and other policy issues. the Asian financial crisis, for example, Made- Participants contribute to learning in a line Loh argued that by 1998, the effects of the number of ways: through informal interac- Asian crisis were being fully felt and that the tions with fellow participants during class- government moved quickly to address the cri- room breaks and off hours, through sis. It adapted its approach to changing condi- 14 Presentations by Participants in Selected Institute Courses at Headquarter and Overseas, 2000 Participant Country Topic Zoltan Jakab Hungary Trade Integration in Hungary Ajay Prakash India Financial Liberalization in India Nurlan Nurseiit Aitkaliuly Kazakhstan Exchange Rate Policy in Kazakhstan Hou Shaoze China Reform and Difficulties in Banking Sys- tems: General Introduction of China’s Experience Charles P.R. Joseph Indonesia The Impact of Asian Crisis: How Did Indonesia Deal With It? Yehiel Rehavi Israel Exchange Rate Policy in Israel Fernando Vasquez Peru Business Cycles and Fiscal Policy Rules Hastam Shah Pakistan The Public Debt Problem in Pakistan Asha P. Kannan India Macroeconomic Adjustment Experiences in India Mohamed Ramzi Mohamed Sharif Malaysia Macroeconomic Adjustment Experiences in Malaysia Hazem Shunnar West Bank and Analysis of Palestinian Balance of Gaza Strip Payments Kevin Charles Greenidge Barbados Adjustment Process in Barbados in 1991–92 Hayden Manzano Trinidad and Tobago Recent Developments in the Energy Sector in Trinidad and Tobago Serign Cham The Gambia Structural Adjustment and Macroeco- nomic Policy Issues in The Gambia Madeline Loh Malaysia Macroeconomic Adjustment Experiences in Malaysia Oscar Sánchez Mexico Macroeconomic Adjustment Experiences in Mexico tions, for example, by initially tightening mon- forms of monetary base targeting were not etary and fiscal policies, but when signs of successful, prompting the central bank to economic improvement in the region emerged, move toward inflation targeting. He concluded it eased those policies and initiated structural that although the central bank has become reforms in the financial, corporate, and labor more proactive toward inflation expectations— markets. She concluded that although these lowering inflation from 52 percent to under reforms have been successful so far, further 10 percent in about 5 years—hurdles remain reform in these markets is expected. before Mexico can implement a true inflation- Oscar Sánchez, another participant, targeting regime. reviewed recent monetary policy experiences Indeed, these example highlight an impor- in Mexico. According to his recounting, after tant difference in the learning that occurs at the country abandoned its fixed exchange rate an IMF Institute course and that which regime in 1995, it searched for a reliable occurs in a university setting: contributions ✒ nominal anchor. Experiments with various by participants themselves. 15 Vienna Conference Focuses on geography, but better economic policies also Challenges to Completing Transition played an important part in the more success- ful cases. From page 1 John Odling-Smee, Director of the IMF European II Department, focused in particular One highlight of the conference was the on one of the most important reasons for slow participation of the heads of three of the JVI’s structural reforms in the CIS countries— sponsoring organizations. Michael Moore, opposition to promarket reforms from power- President of the World Trade Organization, ful vested interests. He noted that countries delivered the opening address; Horst Köhler, that pursued halting and relatively less ambi- Managing Director of the IMF, gave the tious reform agendas—perhaps believing that keynote address at the gala dinner; and Jean in so doing they could protect their popula- Lemierre, President of the European Bank for tions from the worst consequences of the Reconstruction and Development (EBRD), transition to capitalism—also created myriad delivered the closing remarks. Another high- opportunities for rent-seeking and corruption. light was the participation of many high-level Once individuals and groups secured lucrative officials from the transition countries them- income streams, they were loathe to give them selves, including ministers of finance, gover- up. And because they have control over prof- nors of central banks, and deputy ministers itable sources of economic rent, they also and governors. have the means to influence public policy in a Four common themes emerged from the way that preserves them. He noted that conference. although reducing the influence of vested First, a decade after the political transition, interests over policymaking and implementa- much has been achieved but, equally, much tion was not easy, the experience of transition remains to be done. While Central and East provides an important lesson: gradual and European countries, and to some extent the halting structural reforms create a window for Baltic countries, have made the most progress corruption, whereas more rapid reforms make toward completing the transition process, it more difficult for vested interests to become huge challenges remain for Russia and the entrenched. rest of the Commonwealth of Independent Andras Inotai, Director General of the Insti- States (CIS). Differences can be explained tute for the World Economy at the Hungarian partly by favorable starting positions and Academy of Sciences, contended that the Joint Vienna Institute Welcomes Distinguished Visitors On November 7, the Joint Vienna Institute (JVI) hosted three distinguished visitors—Horst Köh- ler, Managing Director of the IMF, Klaus Liebscher, Governor of the Österreichische Nationalbank, and Karl-Heinz Grasser, Minister of Finance for Austria. JVI Director Lindsay Wolfe welcomed the visi- tors with a brief introduction to the JVI. He noted that since the JVI opened its doors in 1992, it has trained 12,500 participants from 33 transition countries. The group was given a tour of the facilities, including the student living quar- ters, the classrooms, and staff offices. Mr. Köhler spoke briefly to Klaus Liebscher, Governor of the Österreichische Nationalbank, participants of the Applied Eco- Horst Köhler, Managing Director of the IMF, and Karl-Heinz nomic Policy course, and following Grasser, Austria’s Minister of Finance participate in a press briefing the tour, gave an informal press at the JVI. briefing for local journalists. 16 growing differentiation in the transi- tion process is due to different levels of socioeconomic development and maturity prior to 1989, the year of the start of transformation; to differ- ent economic policies adopted after 1989, particularly in structural trans- formation, privatization, and foreign direct investment; and more impor- tant, to different spillover effects of the policies chosen in the first half of the 1990s. Second, the prospect of accession to the European Union (EU) is a pow- erful incentive for reform and can be a valuable anchor for economic poli- cies. Much as the Maastricht con- vergence criteria shaped the economic policies of current EU members for many years, the acces- JVI Director Lindsay Wolfe confers with Gagik Arzumanyan, sion process is spurring reform in Deputy Minister of Finance and Economy of Armenia. the 10 transition economies cur- rently negotiating with the EU. In contrast, the CIS countries lack such an external political anchor. gressed more slowly, so too has trade Elena Kohútikóva, Vice-Governor of the restructuring. National Bank of Slovakia, noted that the EU Many speakers stressed the importance of has become a natural benchmark for the social safety nets; without such fall-back economy and the socioeconomic system as a mechanisms, pursuing the necessary restruc- whole. She pointed out that among the candi- turing of the economy is more difficult and date countries for EU accession, Slovakia is sometimes impossible. Several speakers, ranked fourth (after Slovenia, the Czech including EBRD President Jean Lemierre, Republic, and Hungary) and that its output noted that addressing poverty in transition represents approximately 46 percent of EU’s economies is the key challenge ahead. level and 67 percent of the weakest country of Fourth, good governance is a necessary con- the EU (Greece). The big dilemma for Slo- dition to encourage investment and economic vakia, she said, was the choice between con- growth. Although difficult to define, most cluding reforms called for under the National speakers agreed that good governance is a key Program for the Adoption of the Acquis (NPAA) ingredient of successful transition. IMF Man- and accelerating the process of catching up aging Director Horst Köhler emphasized that with the EU in economic output by increasing at all stages of transition the highest attention the pace of economic growth. must be paid to building sound institutions Third, structural and institutional reforms, and strong governance. He noted that poor including the establishment of effective social governance and weak institutions create too safety nets, are essential to the transition pro- many opportunities for corruption, undermin- cess. In the early stages of transition, the ing investor confidence and eroding public emphasis was on macroeconomic stabiliza- support for reform. Fighting corruption, he tion, and some speakers thought that struc- said, requires transparent legal and regula- tural and institutional reforms had initially tory frameworks, strong law courts, trustwor- been neglected. Among the structural reforms, thy law enforcement agencies, and better financial sector reform plays a key part. Suc- trained, properly paid civil servants and ✒ cessful cases, such as Hungary, suggest that judges. the role of foreign banks can be very impor- tant: in addition to much-needed capital, they bring technical expertise that has valuable spillover effects on the rest of the economy. And where economic restructuring has pro- 17 Vittorio Corbo of the Pontificia Universidad Managing National Economies in Católica de Chile spoke on the Latin American Time of Globalization perspective on globalization, using Chile as his From page 1 main example. He noted that the development model used by many Latin American countries Mohamed Khalfan Bin Khirbash, Minister of until the 1970s was based on a strategy that State for Finance and Industry of the United stressed import substitution and a high degree Arab Emirates, opened the seminar. In his of intervention by the state. Starting in the opening remarks, he stressed that the issues of 1980s, however, many countries introduced globalization and domestic economic manage- reforms aimed at opening their economies to ment go hand in hand as countries try to fine- foreign trade and competition, eliminating dis- tune their integration into the world economy. crimination against foreign direct investment, The presentations began with the global deregulating and privatizing public utilities, perspective, then went on to regional and and reducing the role of the state in the econ- country-specific experiences. Michael Mussa, omy. These reforms prepared those countries Economic Counselor and Director of the to live in a global environment and to with- Research Department of the IMF, spoke on stand the shocks emanating from the Asian the world economy in the context of globaliza- crisis in 1997–99. tion. His presentation touched on such issues The final two presentations focused on the as the role of international trade in increasing specific experiences of Egypt and Lebanon. the economic benefits of globalization, eco- Mahmoud Mohieldin of the Egyptian Ministry nomic globalization through capital flows, and of Economy and Trade noted that Egypt dealing with the instability of short-run capi- opened its economy significantly in the tal flows. His presentation was followed by mid–1970s and implemented policies aimed at that of Shahid Yusuf, Research Manager, achieving macroeconomic stability. Although Development Economics Research Group of Egypt’s economic performance has been the World Bank. Yusuf focused on the chan- uneven during the past 25 years, there is no nels through which globalization affects eco- doubt that the economy has achieved high nomic development, such as trade, capital rates of growth and that people’s living stan- flows and financial capability, migration, and dards have improved significantly. The chal- diffusion of technology. lenge ahead is to maintain macroeconomic Shang-Jin Wei of the Brookings Institution, stability while accelerating deregulation and speaking on the Asian experience with global- privatization. ization, demonstrated—using city data for Atif Kubursi of McMaster University dis- China—that openness through higher exports cussed how a post-conflict country such as and foreign direct investment encourages eco- Lebanon could regain its prosperity in a glob- nomic growth. He further noted that the qual- alized environment. He advocated that ity of public governance in a developing Lebanon should reshape its economy along country plays an important role in a country’s the lines of the “new economy” that has ability to absorb the beneficial aspects of glob- emerged as a result of the revolution taking alization and that globalization itself can place in the information computer technology. strengthen the developing countries’ incen- In such an economy, growth emanates from tives to improve public governance. technology-driven sectors. The success of this From left to right: Mohsin S. Khan, Director of the IMF Institute, Jassim Al-Mannai, Director General of the AMF, and Mohamed Khalfan Bin Khirbash, Minister of State for Finance and Industry of the United Arab Emirates, and Ali Sadik, Director of EPI, at the high-level seminar in Abu Dhabi. 18 strategy, however, rests on Lebanon’s ability of capital flows is economically damaging. to retrain its educated labor force and attract Others pointed to the overwhelming evidence Lebanese talent currently residing outside the that open and liberalized economies lead to country. economic growth and higher living standards. Some officials, especially from countries Overall, participants agreed that the seminar that remain relatively heavily regulated and provided a balanced view of globalization, closed, expressed serious misgivings about emphasizing that domestic policies play an globalization, noting that domestic industries important role in helping to maximize the ben- would not be able to withstand the pressure efits of globalization while minimizing its ✒ of competition and that the inherent volatility costs. IMF Institute: Overseas Training Courses and Seminars, July–December 2000 Activity Date Location Regional Course on Financial August 18–September 1 Barbados Programming and Policies CEMLA September 4–5 Mexico Regional Workshop on Banking September 11–15 Senegal Soundness Regional Course on Financial September 25–October 6 Cameroon Programming and Policies Regional Course on Financial October 9–20 Portugal Programming and Policies Regional Workshop on Banking October 30–November 3 Cameroon Soundness Regional Course on Macroeconomic October 30–November 10 Malaysia Management and Financial Sector Issues Seminar on Financial Analysis November 4–8 Saudi Arabia and Programming Regional Course on Financial November 27–December 8 Senegal Programming and Policies Regional Course on Advanced December 4–15 Estonia Macroeconomic and Financial Management Lacea Seminar December 12–14 Brazil 1List does not include courses/seminars taught at overseas regional centers. 19 changes Appointments and Departures and transfers transfers Mr. Norbert Funke joined the African Division Mr. Peter Montiel, Senior Policy Advisor in the as Economist in July. Immediate Office, resigned from the Fund in Mr. Woon Gyu Choi joined the Asian Division July. as Economist in July. Ms. Saadia Refaqat, Research Assistant, in Mr. Dhanusha Ponnamperuma joined the the Immediate Office, resigned from the Fund Administrative Division in July. in July. Ms. Anne Epaulard joined the African Division Ms. Susan George, Economist, in the Euro- as Economist in August. pean Division, transferred to EU2 in July. Mr. Danyang Xie joined the Asian Division as Ms. Maryse Dube, Staff Assistant, in the Economist in August. European Division, transferred to APD in July. Mr. Stanley Black joined the Immediate Office as Senior Policy Advisor in August. Mr. Arturo Rios, Research Assistant, in the Immediate Office, resigned from the Fund in Mr. Juan Carlos Flores joined the Immediate August. Office as Research Assistant in August. Mr. Andrew Feltenstein, Visiting Scholar, in Ms. Caryl McNeilly returned to the European the Immediate Office, resigned from the Fund Division as Senior Economist in September in August. from her leave of absence. Mr. Greg Dahl, Advisor, in the Immediate Mrs. Gulrukh Gamwalla joined the European Office, transferred to Madagascar as Senior Division as Staff Assistant in September. Resident Representative in August. Mr. Paul Wade joined the European Division Mrs. Jeanine Moeis, Senior Administrative as Senior Economist in September. Assistant, in the Asian Division, transferred to Ms. Jean Laidlaw joined the Immediate Office STA on a one-year TAP in August. on a one-year TAP as Senior Administrative Mrs. Margaret Boesch, Senior Administrative Assistant in October. Assistant, in the Immediate Office, transferred Ms. Myrna Bas joined the Administrative Divi- to the Asian Division in August. sion on a six-month TAP as Staff Assistant in Mr. Qaizar Hussain, Economist, in the Asian October. Division, transferred to APD in August. Ms. Irina Dolinskaya joined the European Mr. Richard Mangus, Staff Assistant, in the Division as Economist (EP) in October. Internal Training Section, resigned from the Mr. Dmitriy Gershenson joined the Asian Fund in September. Division as Economist (EP) in October. Ms. Jodi Scarlatta, Senior Economist, in the Mr. Serge Ghanem joined the African Division European Division, transferred to MAE in as Economist (EP) in October. September. SPECIAL NOTICE for Applicants and Sponsors of English Language Courses in Washington Applicants for IMF Institute courses held in English at headquarters are expected to show proof of English language proficiency. We are, therefore, requesting proof of such proficiency before admission decisions can be made. For the benefit of participants and their sponsors, the following information may be helpful: Interna- tional tests, such as the TOEFL and the IELTS, are now available worldwide, and applicants who need to take such tests are advised to visit their web sites for additional information: http://www.toefl.org/comptest.html or http://www.edunet.com/ielts/. If you take the TOEFL, please enter the IMF code 5456 to expedite receipt of the score. Such tests may not be easily available at short notice. If you find it impossible to take either of these tests in your country in time for your course in Washington, please contact the IMF Resident Represen- tative or other IMF staff who can attest to your language skills and request them to send us a note about your language proficiency. This is an interim measure. In the future, we urge all applicants and sponsors to ensure that a test score is included in the application form and encourage applicants to take a test before applying, or produce other proof of proficiency at the time of application. 20 imf headquarters participants June–December 2000 2000. 9 Monetary and Exchange Operations—Spanish 2000. 10 Macroeconomic Adjustment and Financial Sector Issues—English 2000. 11 Macroeconomic Management and Policies—Arabic 2000. 12 Public Finance—English 21 2000.13 Macroeconomic Management and Policies—English 2000.14 Advanced Financial - Programming—Spanish 2000.15 Financial Programming and Policies—English 2000.16 Macroeconomic Adjustment and Financial Sector Issues—French 22 imf headquarters participants 2000.17 Money and Banking Statistics—English 2000.18 Advanced Financial Programming—French 2000.19 Macroeconomic Adjustment and Financial Sector Issues—Spanish 23 Introducing the IMF Institute's new Distance Learning website: https://www-dln.imf.org Second Distance Learning FPP course takes off On January 15, 2001 the IMF Institute began the second delivery of its distance learning FPP course. The first one was delivered in spring 2000. From the more than 120 applicants, 50 participants were selected. They work and live in five different continents and in many different time zones. The first part of the course (80 hours) is being conducted from a distance by four Institute economists: Caryl McNeilly, Paul Wade, Dalia Hakura, and John Matovu. The course coordinators are Willem Bier and Caryl McNeilly. Those participants who complete the distance portion of their work are invited to a two- week seminar in Washington in April. The material the participants will be using has been mailed to them. It is also available through the Institute's Distance Learning website: https://www-dln.imf.org, now up and operational. The site includes a bulletin board, where participants can conduct small group discussions, very similar to the counseling groups that take place in face-to-face Institute courses. Former participants can also access the site (though they cannot participate in the discussions). To sign up, just go to the address and sign up. It is fast and easy. 24