Go to IMF or not?

Gamani Corea, a former Governor of the Central Bank and ex-Secretary-General of UNCTAD, was one of the harshest critics of the World Bank and the International Monetary Fund (IMF). Addressing a luncheon at the UN delegates dining room, he castigated the two Bretton Woods institutions for their obsession in laying down stringent conditions— euphemistically called “structural adjustment policies”(SAPs)  — in return for concessional loans to the world’s poorer nations.

The tragedy of it all, he said, is that virtually all of the crises-stricken Third World nations have a common finance minister: the IMF.

As if to reaffirm Corea’s contention, New York Times columnist Tom Friedman recounted in his book on globalization an anecdote about a newly-appointed Indian finance minister being congratulated by a friend. “Don’t congratulate me,” he tells the friend, “I am only half a minister. My other half is in Washington” (read: IMF).

The IMF’s demands from developing nations usually include the removal of state subsidies, privatization of government corporations, downsizing of bureaucracies, devaluation of national currencies, reduction of budgetary deficits, and sharp cuts in military spending and government salaries.

In effect what the IMF says to most developing nations is: If you don’t play the game by our rules, you don’t get anything from us.

(Excerpted from Thalif Deen’s recently published: NO COMMENT….and don’t quote me on that)