IMF boss tells poor countries to cut use of global consultancy firms

The Managing Director of the International Monetary Fund (IMF) Christine Lagarde has told poor countries to stop using global consultancy firms to write development strategies.

She singled out inefficient spending on consultants for criticism at an event about funding the sustainable development goals at the World Economic Forum (WEF) in Davos, Switzerland.

Mad. Lagarde even ordered any representatives of “the McKinseys and Boston Consulting Groups” or any other consultancy firms in the room to listen to her as she delivered an uncomfortable message about their work.

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The former French government minister said low-income and emerging-market economies had to raise more revenue themselves domestically and cut white elephant projects and corruption.

She argued the private sector had a key role to play if poorer countries were to ever achieve the 17 development goals set by the UN.

But she warned: “I’m looking around to see whether there are any of the McKinseys and Boston Consulting Groups, and if there are please listen to me.

“I see many, many low-income countries and emerging-market economies spend millions of dollars commissioning consultants to build their strategy plan. I would recommend some saving be made by taking the 17 principles, the actionable items, and start with that.

“From there, the consultants can actually do their job of putting it into reality. But don’t reinvent it — it’s right there. So much is wasted. That’s part of the inefficient spending that can actually be saved.”

The comments may spark controversy not only in the consultancy industry, but also among critics of the IMF itself.

The fund has a tarnished reputation in many parts of the world for its heavy-handed promotion of free-market reforms in indebted countries over the past few decades.

The sight of a senior IMF figure now urging developing countries to cut down on their use of imported private sector expertise may raise eyebrows.

Credit: finance.yahoo.com