Last January, Andorra initiated the formal procedures for obtaining membership of the International Monetary Fund. Admission to this organisation will provide the principality with international solvency, which will in turn contribute to improving the country’s rating.
Inclusion in the IMF, which currently comprises 189 member states, will mean that Andorra will no longer be among the five countries that are currently members of the United Nations but not part of the International Monetary Fund.
What will IMF membership mean for Andorra?
Firstly, the aforementioned membership of this body is an important factor in Andorra’s international relations, which will benefit from a stamp of credibility and trust at the global level. Admission to the IMF is a guarantee of compliance with the precepts of international information and transparency. This will grant Andorra greater credibility and solvency in the various markets.
In addition, by joining the International Monetary Fund, Andorra will be entitled to receive training and technical assistance in financial or statistical affairs, including access to funding if necessary.
Finally, the rating agencies (likely guided by the recommendations of the European Parliament and the European Union in the context of the Association Agreement between Andorra and the 27 member states) positively assess the inclusion of Andorra in this body as it represents additional evidence of the actions being taken to standardise its status in the international financial landscape.
When will the admission become effective?
The process of joining usually takes approximately one year. After formalising the application for membership before the Managing Director of the organisation, a permanent assistance channel will be established with one of the Executive Directors of the IMF.
Subsequently, Andorra will receive a visit from an IMF technical delegation, which will be in charge of proposing a membership fee that the principality will be required to meet (along with the other member states). This cost is calculated based on macroeconomic factors such as GDP, economic variability, degree of openness and international reserves.
The next step is for the work of this delegation to be analysed by the senior management of the IMF, which will submit a resolution for ratification by the board of governors. In turn, the Government of Andorra will also have to approve the final document.
Once everything has been validated, the ratification material will be made available and must be accepted by the General Council of the principality. From that point on, the inclusion of the country in the IMF will be complete.