Demonstrators seen during a protest against the annual meetings of the International Monetary Fund and World Bank, held in Istanbul, Turkey, yesterday.

The International Monetary Fund (IMF) has fired back at claims made by a United States think tank that its programmes are doing more harm than good in many developing countries.

The Washington-based Centre for Economic Policy Research (CEPR) on Monday noted that a recent study found 31 of 41 countries with current IMF agreements have been subjected to harmful monetary and fiscal policies.

However, yesterday the IMF, which is staging its annual general meeting in Turkey, told The Gleaner that the think tank had reached seriously misleading conclusions relying on faulty analysis and often inaccurate information.

Claims rejected

The IMF also rejected CEPR's claim that "growth forecasts were too optimistic when programmes were designed, leading to excessively tight fiscal and monetary policies".

According to the IMF, the reality is quite the opposite.

"In virtually all programmes, fiscal targets were quickly and substantially relaxed once the extent of the crisis became apparent," IMF spokesman William Murray said.

"Monetary and fiscal policies have deliberately sought to offset the fall in global demand."

Murray pointed to a recent internal review of IMF-supported programmes with low-income and emerging-market countries.

IMF review

Following that review late last month, the IMF boasted that a mix of increased resources, policy flexibility, and more focused conditionalities allowed it to better support emerging countries hit by the global financial crisis.

In an analysis of 15 countries, the IMF said its supported programmes were delivering the kind of policy response and financing needed to help cushion the blow from the worst economic crisis since the 1930s.

"What this study tells us is that, with IMF support, many of the severe disruptions characteristic of past crises have so far been either avoided or sharply reduced," IMF Managing Director Dominique Strauss-Kahn said in the September 27 review.

Jamaica is to approach the IMF for a US$1.2-billion standby agreement.

arthur.hall@gleanerjm.com