IMF develops program to help developing countries

IMF develops program to help developing countries    The International Monetary Fund has approved a program to help developing countries meet the balance of payment shortfalls that result from multilateral trade liberalization.
   The program, known as the Trade Integration Mechanism (TIM), is a policy directed at making IMF resources “more predictably available” to qualifying member countries.
   “The TIM is designed to mitigate concerns among some developing countries that their balance of payments positions could suffer, albeit temporarily, as multilateral liberalization changes their competitive position in world markets,” IMF said.
   The biggest concerns for the developing countries are that broad-based tariff liberalization could erode the value of their preferential access to important export markets. Other concerns are that the phase-out of textile quotas at the end of 2004 would expose them to greater competition and that the reduction in agricultural subsidies might result in adverse changes in their food terms of trade.
   “Balance of payments shortfalls are unlikely to be large for most countries, and would eventually be dominated by the positive impact of more open trade,” IMF said. “Nevertheless, they could be significant in the short run for some countries.”
   A qualifying IMF country member may request consideration under TIM if it expects a net balance of payments shortfall as a result of measures implemented by other countries that lead to more open and non-discriminatory market access for goods and services. “The TIM does not cover balance of payments needs arising from reforms to a country’s own trade regime,” IMF said.