IMF plans to take its own advice
The International Monetary Fund is going to cut 400 positions, or 15% of its staff. The IMF is known for requiring developing countries to tighten their belts in return for loans. Jeff Tyler reports the IMF could use some of that same discipline.
IMF Managing Director Dominique Strauss-Kahn at a recent IMF meeting. (IMF)
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Kai Ryssdal: The International Monetary Fund is going to cut 400 positions -- about 15 percent of its staff.
The IMF is known for its strict lending policies, for requiring developing countries to tighten their belts.
Marketplace's Jeff Tyler reports the IMF could use some of that same discipline.
Jeff Tyler: The IMF is expected to face a $400 million deficit by 2010. The job cuts could save the fund about $100 million.
Robert Dunn is an economics professor at George Washington University.
Robert Dunn: It makes sense because lending activity at the IMF is down rather sharply. The IMF is like a doctor. It deals with sick people. And not many people are sick right now, in balance-of-payment terms.
Fewer crises means fewer loans and fewer loans means less earnings, so the IMF is looking for other ways to support itself.
One option would be to sell some of the Fund's massive stash of gold and put that money to work in investments.
Dunn says the timing is pretty good, with gold now trading for almost $800 an ounce.
Dunn: If you think gold has peaked and it's probably going to come down in the next few years, it would not be a bad idea to get out.
Of course, business could pick up for the IMF if there's a fresh financial crisis.
Dunn says that a U.S. recession next year could put some trade partners back in line for IMF loans.
I'm Jeff Tyler for Marketplace.
