Outlook: IMF offers the wrong medicine
Friday 21 August 1998
Substitute the International Monetary Fund for the van with the flashing orange light and imagine one of those cold winter nights when every patrol is out on call. Everyone waits a long time to get service. That's how it is for the IMF right now - it has never faced larger or more pressing calls for its assistance.
Over the last 12 months the IMF has pledged the best part of $45bn of Western money in fighting the fires now raging around the world's financial jungle. So it is hardly surprising that when Moscow got on the line last weekend to ask for a further dollop of Western aid, the guys in Washington decided to leave the phone ringing.
The admission from Russia's central bank chief, Sergei Dubinin, that he had blown $3.8bn of IMF money on a fruitless effort to shore up the sinking rouble is one of the most astonishing stories yet to have emerged from the financial turmoil that has engulfed emerging markets.
Did the IMF know that this was how its money was being used and if it did, how on earth could it have sanctioned such waste after the lesson of what had happened to currency pegs in the Far East? And if it didn't know, why not? Should the IMF really be allowing our money to be squandered in this way?
Even before this, there was already a growing opposition in Congress to any further bankrolling of the IMF's activities. The immediate beneficiary of aid to the Far East has not been the people of those countries at all, but very solvent Western creditors, those easily capable of taking and surviving the hit. The immediate beneficiaries of the first tranche of support to Russia seem to have been George Soros and the other New York- based hedge fund operators who have been attacking the rouble.
The case for IMF support has always been that the consequences of the alternative, a complete banking collapse, are just too awful to contemplate. That, and the package of conditional reforms the IMF is able to impose on these troubled economies. What's now happening in Russia will greatly strengthen the voices of those arguing that this is the wrong medicine, that it would be better to let these countries go to the wall and damn the consequences.
- 1 Russell Brand accuses FOX News anchor Sean Hannity of terrorism after aggressive Israel-Gaza debate
- 2 Disney heiress Abigail disowns her share of family profits in West Bank company
- 3 The secret report that helps Israel hide facts
- 4 Israel's propaganda machine is finally starting to misfire
- 5 'Hello mum, this is going to be hard for you to read ...'
Sally Farmiloe dead: Howards' Way actress, and former mistress of Jeffrey Archer, dies aged 60
Russell Brand accuses FOX News anchor Sean Hannity of terrorism after aggressive Israel-Gaza debate
Pope Francis issues top 10 tips for happiness – including don’t try to convert other people
Sabina Altynbekova, the girl branded 'too good looking' for volleyball, says social media obsession with her is a 'bit much'
Justin Bieber posts Instagram photo of Orlando Bloom crying after Ibiza fight 'over Miranda Kerr'
The secret report that helps Israel hide facts
Land for gas: Merkel and Putin discussed secret deal could end Ukraine crisis
Woman and two children killed by mob in riots over 'blasphemous' Facebook post in Pakistan
A day in the life of Vladimir Putin: The dictator in his labyrinth
Putin is 'thuggish, dishonest and reckless', says British ambassador to US
Richard Dawkins tweets: 'Date rape is bad, stranger rape is worse'
- < Previous
- Next >
iJobs Money & Business
£20000 - £24000 per annum: Harrington Starr: A leading provider of web based m...
£28000 - £32000 per annum: Ashdown Group: Secretary (Sales Team Support) - Mat...
Competitive (DOE): Guru Careers: We are looking for an Assistant Management Ac...
£600 - £700 per day + competitive: Orgtel: Senior Investment Accounting Change...