The International Monetary Fund turns 65 this year. Until the current economic crisis, it had reduced its workload drastically to a near-retirement level — its total loan portfolio plummeted by 92 percent in four years. But like many senior citizens, the Fund has kept working past retirement age — and is now expanding its responsibilities.
The I.M.F. has a track record that seems to have been almost completely ignored in discussions of a proposed $750 billion increase in its resources. Nearly 12 years ago, a financial crisis hit Thailand, South Korea, Indonesia, the Philippines and Malaysia. The word “contagion” became part of the financial reporting lexicon as the crisis spread to Russia, Brazil, Argentina and other countries. Continue reading
Raza Rumi’s oped published in the NEWS (Pakistan)
The not-so-inevitable is about to happen. After weeks of groping in the darkness of global financial mess, the Pakistani government is negotiating with the International Monetary Fund. Admittedly, Pakistan’s options are limited, given its intractable dependence on oil imports for survival. The civilian government moving from one crisis to another has elevated indecision to a policy status. This does not imply that we start echoing the unwise cacophony of impatience with an elected and far more legitimate government than the eight-year-long authoritarian regime. But then who cares: if recent history is a guide, PPP governments come with a brand or at least get branded as incompetent comprising coteries of cronies, as if the rest of the country is a fair, rule-based haven.
The plain truth is that the power-wielders of Pakistan have been following a set of disastrous policies for decades that have now put the survival of the state, or as we knew it, in question. From the great hunts for strategic depth and Jihad, and from nurturing domestic oligarchies and pampering a delinquent industrial sector at the expense of land tillers and equitable irrigation, we are now paying the price for policy making by the elites for the sustenance of the elites. Continue reading
From the Daily Times, Pakistan
* Pakistan Economy Watch president says IMF policies ruined 68 economies worldwide
ISLAMABAD: The Pakistan Economy Watch has said that the popularity of International Monetary Fund (IMF) has dwindled significantly and it should modify its policies to increase the level of acceptance.
The popularity of fund established in 1945 is at an all-time low. Lack of customers has put its own existence in jeopardy. It’s high time for international lenders and IMF to reconsider their policies often blamed for enhancing poverty and gap between rich and poor, said Dr Murtaza Mughal, President of the Pakistan Economy Watch. Continue reading
Dismay expressed over non-co-operation of IFIs
ISLAMABAD: Pakistani authorities have expressed serious concerns over the non-cooperation of International Financial Institutions (IFIs) with the newly elected government led by Pakistan Peoples Party.
International Monetary Fund’s (IMF) technical mission, which held its technical review meetings with different federal economic ministries, was accordingly informed by one of a senior official that non-cooperation of lending agencies with the new government would be harmful for the democracy. This behaviour will strengthen the general perception in Pakistan than IFIs do not cooperate with democratic governments and extend maximum financial help to the non-elected governments and dictators, official sources told daily Times on Wednesday. Continue reading
Filed under IFIs, Pakistan
Discovered this erudite blog “Law and Development” and a brilliant post titled “Do World Bank and IMF Programs cause crises?”
The conclusion of Axel Drefer and Martin Gassebner here is a qualified yes.
We examine whether and under which circumstances World Bank projects and IMF programs affect the likelihood of major government crises. Using a sample of more than 90 developing countries over the period 1970-2002, we find that crises are on average more likely as a consequence of Bank and Fund involvement. While the effects of the IMF to some extent depend on the model specification, those of the World Bank are shown to be robust to the choice of control variables and method of estimation. We also find that governments face an increasing risk to enter a crisis when they remain under an arrangement once the economy performs better. The (economic) conditions present when a new arrangement is initiated, however, do not affect the impact of Fund and Bank on the probability of a crisis. Finally, while crisis probability rises when a government turns to the IFIs itself, programs inherited by preceding governments do not affect the probability of a crisis.