The World Bank has been very critical of the IMF because the WB has a different institutional mission - that of fighting global poverty through aid and credit not otherwise available to poor nations in the open market. On the other hand, the IMF is a bankers institution that speaks the language of workouts and restructuring to minimized loss to the lenders. It also firmly believes in the doctrine of market fundamentalism through fiscal and monetary discipline - high interest rates, accelerated bank failures, high unemployment, corporate bankruptcies, and totally open markets, and high tax rates etc. IMF has since acknowledged that its misguided policies had hurt more than it helped, and Washington has also given the IMF the word that socio-political stability is not unimportant. So everyone is ignoring the IMF, including its only staff.
Several Asian economies have seem to be recovering if you look at the stock market. A case can be made that this is merely the second wave bubble, having bought in low 6 months ago, the hedge funds are now pushing prices up for another profit taking. Much of the "recovery" indicators have been pushed up by artificially low interest rates, a strategy of the banks that loss leading low rates is better the wholesale default. If you look at domestic consumption and unemployment, the trend is still down. It is no longer a crisis because the pain has been normalized. It has shifted from a crisis to a long term structural depression. Just like Kosovo, the term crisis will soon be inappropriate, but it does not mean the end.
Henry
Doug Henwood wrote:
> Henry C.K. Liu wrote:
>
> >Asian solution will come from creating Asian institutions to supplant
> >the unresponsive global institutions within which Asian economies are
> >increasingly put at a competitive disadvantage. Grass root resistance to
> >American demands for trade liberalization will force Asian leaders to
> >seek Asian regional solutions, perhaps a yen based currency regime with
> >an Asian Monetary Fund.
>
> I've been reading stuff lately, mostly in the FT, suggesting that the Asian
> crisis countries have been showing signs of economic recovery and, not
> coincidentally, disobeying the IMF. Malaysia, of course, was the star
> rebel, but the FT reported the other day that Thailand has pretty much torn
> up the IMF agreement and has loosened monetary & fiscal policy
> substantially. South Korea has been less overtly rebellious, but it too
> hasn't been following the letter of the Fund's law. Anyone know any more?
>
> Doug