F33 - International Monetary Arrangements and InstitutionsReturn

The aim of this paper is to provide information on the current standing of the Czech Republic in the International Monetary Fund (IMF) with respect to its role as one of the main institutions that tries to solve contemporary problems of world economy on the one hand, and the problems of the IMF itself on the other hand. The paper focuses on individual phases of the country's membership since 1990, when the Czech Republic joined the IMF. It provides information on both reasons for and forms of financial and technical help that the Czech Republic has utilised until now, and the help that the Czech Republic has provided to weaker members of the International Monetary Fund. Also, the paper analyses the quota reform and the IMF governance and their impact on the Czech Republic's standing within the institution. It draws attention to a rising foreign exchange exposure of the Czech Republic to the IMF that originates from both an increase in membership quotas and extending of loans to other members. Naturally, the paper also analyses the increased risk of the loans that have been provided.

The article deals with the world functioning from the view of the hegemonic stability theory, which proposes that open international systems are connected with a dominant state existence, and possibly its post-hegemonic functioning in the form of country co-operation. The question is demonstrated on the example of the US dollar performing the role of the key world currency in both private and official use at present: it prevails in foreign currency transactions, in international reserves, in overseas bank deposits and loans, etc. Problems of the global economy, especially global imbalances, have led to suggestions by China, other countries and the International Monetary Fund to reform the global monetary order. These suggestions have taken the form of a multi-polar system of more currencies belonging to the economically most important countries (dollar zone, euro zone, Asian currency zone). Other suggestions include a system based on Special Drawing Rights, where a change ought to be made in the basket currencies adequately to the world economic situation, and a system of creating a new global currency. The advantages of a new global currency would be especially no connection to national economy developments, higher stability and no risk on assets denominated in this currency due to the highest rating. It is discussed which attitudes of the main countries such as the USA, BRIC and others could be possible in the view of the theories mentioned.

Even though the efforts to foster global economic governance have been a longstanding issue of global economic policies, their effectiveness has been questioned by the current crisis. The crisis has revealed many systemic issues that would require global solutions on the one hand, but on the other hand, these solutions are more difficult to achieve. Based on an analysis of basic systemic issues of global trade and finance, the aim of this paper is to explore whether the current crisis leads to fostering supranational features in global economic governance. The issue is first studied at the theoretical level the outcomes of which are subsequently applied to recent evolutions in global governance, which seems to be the most appropriate level to face global systemic issues. According to the authors, more supranational features should be reflected namely in a more effective and intensive coordination of macroeconomic policies of systemically important countries in order to keep the global economic system stable. In the conclusion, the authors try to make a specific recommendation for the eventuality that the hypothesis on stronger supranational coordination cannot be fully confirmed.