Critics circle as IMF questions its role
Sunday 12 April 1998
The meeting coincides with a meeting of the World Bank and a semi-annual meeting of the finance ministers and central bankers of the G7 leading industrial nations. These, too, will grapple with the IMF's role in the world economy.
G7, IMF and World Bank officials are expected to review what went wrong in responses to the Asian financial crisis and discuss how better to anticipate and prepare for future crises.
"The IMF is initially going to focus on ways to improve transparency, more timely information about countries and how to get it, and how to make sure it is valid," said Robert Litan, senior fellow at the Brookings Institute.
Critics are calling on the international lender-of-last-resort to explain its actions - and inaction - in Asia, and to say why governments should pay dues to a secretive organisation they claim failed to prove its worth in the Asian crisis, and that may have bailed out reckless investors along with innocent bystanders.
The meetings come six months after the crisis hit, forcing the IMF to pull together economic aid packages of $57bn for Korea, $40bn for Indonesia and $17bn for Thailand.
The IMF intends to push countries harder to share economic information, to gather more and better information on its own and to disseminate that information more widely so market participants can see future crises in the making. To that end, the Fund will submit a proposal to its Interim Committee to create a "code of conduct" for disclosing economic information from member countries.
The IMF's sometimes harsh prescriptions for recovery are also coming under greater scrutiny. "The over-zealous demands for deflation are an example of sticking to an old prescription for a new illness," said Veena Siddharth, a policy adviser at Oxfam International. "There is also the question of governance which the Fund deals with in only the most abstract way."
The IMF defends the conditions of its bailout packages, and says necessary adjustments are made during each quarterly review of progress made by the governments. But Indonesia won IMF approval to maintain subsidies for food and other necessary goods, which the IMF had initially banned. The IMF also agreed to allow Thailand to have a 1.6 per cent GDP deficit instead of the agreed 1 per cent.
All this comes against the backdrop of a political war in Congress over US money to replenish IMF coffers. Congress has been debating whether to approve President Clinton"s $18bn request for the IMF. Last autumn the US agreed to provide $3.5bn for the IMF's "New Arrangement to Borrow", a reserve line of credit from leading industrial nations, and $14.5bn for the fund's general resources account.
Congressional critics accuse the IMF of excessive secrecy and arrogance towards those who demand that it reveal more about internal decision-making.
Copyright: IOS & Bloomberg
- 1 Malaysia Airlines MH17 crash: Pro-Russian rebel 'admits to shooting down plane'
- 2 Israel has discovered that it's no longer so easy to get away with murder in the age of social media
- 3 Israel-Gaza conflict: The myth of Hamas’s human shields
- 4 Amy Winehouse unpublished 2004 interview: ‘Ten years from now I’ll be 30, so I’ll maybe have one baby’
- 5 Dutch paedophile club to fight their ban at the European Court of Human Rights
Lana Del Rey: 'I have slept with a lot of guys in the industry'
Peaches Geldof cause of death: 'Heroin addict' socialite had taken fatal dose of drug, inquest concludes
Peaches Geldof inquest: Tragic final moments of socialite's life reveal she lied to husband about failed heroin tests
Israel-Gaza conflict: The myth of Hamas’s human shields
Malaysia Airlines MH17 crash: Was a Russian-made missile really parked in this quiet square?
Malaysia Airlines flight MH17 crash: 'Nine Britons, 23 Americans and 80 children' feared dead after Boeing passenger jet is 'shot down' near Ukraine-Russia border
Malaysia Airlines MH17 crash: Vladimir Putin is given 'one last chance' to end hostilities in Ukraine
The 'scroungers’ fight back: The welfare claimants battling to alter stereotypes
The truth about conspiracy theories is that some require considering
Malaysia Airlines MH17 crash: Ukrainian military jet was flying close to passenger plane before it was shot down, says Russian officer
Malaysia Airlines MH17 crash: Massive rise in sale of British arms to Russia
iJobs Money & Business
£350 - £400 per day: Orgtel: PMO Analyst - Banking - London - £350 -£400 per d...
£300 - £350 per day + competitive: Orgtel: Cost Reporting Manager - MI Packs -...
£35000 - £40000 Per Annum plus 23 days holiday and pension scheme: Clearwater ...
£475 - £525 per day: Orgtel: Test Lead, London, Investment Banking, Technical ...