International Monetary Fund: Addressing the true cost of globalisation - As the world economic crisis deepens, critics claim that the IMF should employ more proactive communications to bolster market confidence and allay ordinary people’s fears

Never has the world appeared more like a global village. National economies are now so interlinked that a financial setback in one country can have serious consequences for markets thousands of miles away.

Never has the world appeared more like a global village. National

economies are now so interlinked that a financial setback in one country

can have serious consequences for markets thousands of miles away.



In these circumstances, is there a role for PR to play in bolstering

confidence in the financial markets? And who should be taking the

lead?



There is an argument that the International Monetary Fund (IMF), whose

role it is to loan money to countries to meet their financial

commitments, should be doing more. Its performance over the past year

has come in for some sharp criticism as it has ploughed billions of

pounds into bailing out the economies of Indonesia, South Korea,

Thailand and Russia. Should matters in Brazil worsen further, another

IMF-structured support package will be required.



According to IMF chief press officer Graham Newman: ’There are clearly

lessons to be learnt from the Asian crisis and the contagion that it

caused.



In this year’s annual report the IMF says it has ’stepped up’ its

external relations activities due to the ’scale of the Asian financial

crisis, its global reverberations and the IMF’s role at the centre of

efforts to manage and resolve the financial turbulence’. The document

also outlines the body’s communications objectives, which include

’helping influence economic policy in individual countries’ and

contributing to public understanding and support for the

institution’.



As reported in PR Week (4 September), the IMF has been talking to

agencies including Porter Novelli International, Edelman PR Worldwide

and Hill and Knowlton about conducting a global perception audit as a

step towards improving its image around the world. The need to put such

a programme in place is becoming increasingly urgent, as an agency

appointment is expected shortly.



The IMF faces a big PR task in convincing the very nations whose leaders

have criticised its performance to continue to fill its coffers. There

is also great resentment against the IMF among the countries it has been

bailing out. This is because, in return for lending money, the IMF

demands financial reforms - a task which requires both diplomacy and

skilfull media management.



The fund, which has 182 member countries, takes communication

seriously.



It has a vast external relations department of more than 75 people,

based in Washington.



Although the fund says its external relations activities have been

intensified over the last year, the PR drive has still not gone far

enough. For example, only 10 articles by IMF management and senior staff

appeared in major newspapers and journals over the year. Not a lot to

steady the nerves of a world cripped by financial uncertainty.



According to a consultant at one of the agencies pitching to handle the

IMF’s perception audit: ’They (the fund) are demonstrating a commitment

to transparency and communicating more, but they need to take control of

the agenda from a strategic point of view.’



One regularly missed opportunity to communicate more strategically is

the IMF’s annual meeting. Along with the World Economic Forum in Davos,

Switzerland, it is an event on the international financial calendar

which has genuine global significance. Finance ministers from around the

world schmooze with bankers, not only at the official events but on a

circuit of cocktail parties and receptions.



It is at these often ’lavish’ parties that big deals are cut, says Kerry

Underhill, head of corporate communications at Warburg Dillon Read and

therefore much of the PR effort is on organising these corporate

evenings and attracting the right people to them, instead of using the

occasion to present a united front on issues of global importance.



Due to its international nature the IMF is not the fastest moving of

organisations. But one financial PR agency head feels that it could

still do a better communications job. He says: ’If the IMF is meant to

reassure people in unstable markets that Armageddon isn’t round the

corner it is regrettable that it isn’t more punchy in what it says.’



NatWest group chief economist David Kern takes an opposing view. ’The

IMF can do a lot to improve its performance but its job is not

image-making,’ he says.



NM Rothschild group corporate affairs director James Murray agrees:

’While there is a clear need for unambiguous communications, it is more

a job for Governments.’



Although the Group of Seven industrialised countries has published a

statement assuring the world that it recognises the severity of the

economic situation, it is only comparatively recently, with the crisis

in Russia, that Western Governments have acknowledged that the problem

is not confined to Asia.



According to Financial Dynamics director Julian Hanson-Smith: ’The

difficulty in addressing financial volatility on such a scale is that

there are very few people whom the world will listen to.’



One exception is the chairman of the US central bank, Alan

Greenspan.



’His utterances and how they are construed have the power to move

markets,’ says Hanson-Smith.



PR may be able to improve the image of the IMF but there is little it

can do to resolve the world’s financial crisis. On a domestic level,

however, it is an excellent tool for calming the fears of home-owners,

those concerned about their pensions and other investors.



Have you registered with us yet?

Register now to enjoy more articles and free email bulletins

Register
Already registered?
Sign in

Would you like to post a comment?

Please Sign in or register.