With the knowledge and understanding available today, the international community should be able to do a better job of anticipating weaknesses and undertaking necessary steps to keep crises from taking full form. IMF surveillance of member economies provides a key tool for foreseeing and correcting potential problems. We need a common understanding of macroeconomic, real and financial variables that are key indicators of potential trouble, and the IMF and others should help make the information available. And as we address the macroeconomic priorities of growth and financial stability, we must also attend to the critical task of building the policy, regulatory and legal infrastructure necessary to permit market economies to work. Identifying the key measures that need to be pursued is admittedly easier than implementing them.
Macroeconomic stability is fundamental.
But tax, regulatory and judicial systems that are simple, fair, and credible are equally essential. This means, among other things, ensuring that contracts are enforceable and enforced, private property is respected, and corruption is avoided. We hope that by identifying successes among transition economies, and helping those still struggling to begin to put the basic elements in place, even in microcosm if necessary, we can pave the way for these countries to achieve lasting recovery and contribute productively to the world economy as a whole. Effective and accountable international institutions are a cornerstone of effective work in all of these areas. In Palermo, I look forward to engaging with my colleagues on ways to continue reforms in this area.