The IMF does not "print SDRs." In that regard my remarks regarding the "nonexistence" of SDRs should be kept in mind. They are less "real" than euros, which also are not yet "printed" and do not exist as a medium of exchange, although they exist as a form of bank money. The European Central Bank can issue euros through the banking system without any input of national currencies from any of the eleven euro currency countries. The IMF cannot issue SDRs without an input of national currencies from one or another of its member states.
The euro now lies behind the eleven national currencies (which will cease to exist entirely in 2002). The national currencies lie behind the SDR.
BTW, this is tied to a fundamental fact about the IMF. For all its power it is not a world central bank in the way that the Fed is the central bank of the US or the ECB is the central bank of the eleven EU nations in the euro zone. A number of people, including George Soros, have proposed that the IMF should be transformed into such a body, but it has not happened. Such a transformation would imply a transformation of the nature of the SDR to become more like what you think it is, but currently is not. Barkley Rosser -----Original Message----- From: Chris Burford <cburford at gn.apc.org> To: lbo-talk at lists.panix.com <lbo-talk at lists.panix.com> Date: Tuesday, April 27, 1999 6:42 PM Subject: Re: Marshall Aid for Balkans, Africa
>At 11:52 26/04/99 -0400, Doug wrote:
>
>>>From the April 26 Financial Times:
>>
>
>
>> The prime minister's talk of a Marshall Plan to rebuild the Balkans -
>>with its implication of a vast injection of international aid - even
>>worried colleagues at the UK Foreign Office. "We have never used that
>>phrase," an FO spokesman said.
>
>Fischer is stronger on this aspect.
>
>
>Doug:
>
>>The Marshall money was grants. Any money flowing to Eastern Europe is
>>almost certain to be loans. Big difference.
>
>I also quoted what it is reasonable to suppose are financial sweeteners to
>Bulgaria and Romania. Albania must have had some reassurances too. They
>will be gifts, or at the most soft loans.
>
>From the Washington correspondent of the Guardian Sunday 25th April:
>
>>Britain will today fight to keep open the
>>option of a ground invasion of Kosovo by
>>proposing a multi-million pound aid
>>package to the frontline Balkan states
>>bordering Yugoslavia. Associate status of
>>the EU and Nato will also be offered as a
>>sweetener to the five Balkan countries.
>>
>>At the centre of the proposal is a desire to
>>placate poverty-stricken Macedonia - the
>>most likely springboard for an invasion –
>>which is demanding both cash and close
>>ties to the EU and Nato to avoid civil war.
>>Macedonia has said it will not allow itself to
>>be used as a launch pad for an invasion.
>>
>>British officials see a trade-off between
>>cash for Macedonia and support from the
>>Macedonian government for a Nato invasion
>>to drive Serb forces out of Kosovo.
>
>
>As for the issue between grants and loans, I do not see that is a
>fundamental objection. There can be a mixture of both. They can devise
>schemes for writing off loans as well.
>
>
>Doug commenting on me again:
>
>>>>Another parameter is whether all these bits of aid are grouped together
>>>conceptually in a total development plan for the Balkans.
>>
>>Insofar as there's a development plan, it's likely to be to reconfigure
the
>>region as Europe's on-board sweatshop.
>
>Any area peripheral to the European Union is in danger of being a sweatshop
>having to compete by means of labour power sold at a much lower relative
>price. That will still be the same but the labour power will be in a more
>competitive position if there is an injection of capital. What such areas
>need is the opportunity to rise several rungs up the productivity ladder.
>
>What do the most exploited of the world need? More capital! On *their*
terms.
>
>The struggle that it should be on their terms and not on capitalism's terms
>is part of the world wide struggle for socialism.
>
>
>>>One, it looks bigger and better that way. If charity is to be given let
it
>>>be publicised as loudly as possible.
>>
>>Jesus would disagree.
>
>Eh? Since when do we turn to Jesus for a critique of capitalism? Somewhat
>anachronistic.
>
>No, I suggest that it is inherent in the self-reproduction of the
>capitalist system that capitalists make periodic public displays of their
>generosity and social responsibility. It also serves to redistribute
>surplus value more widely in the economy, so it diffuses revolution twice
>over. This is real money, real resources, capable of purchasing real use
>values.
>
>
>>>But to do so dismissively may also play into a sort of tribal pecking
order
>>>culture in which certain correspondents are thought to be ridiculous and
>>>others not. This merges with the received wisdom of unanalysed leftist
>>>prejudices, and can lead to individuals getting scape-goated and
suspended
>>>on other lists, if not this one. Carrol's peevish and insulting
>>>irritability is particularly culpable in this respect because it gives
>>>cover for certain moderators to foreclose debate around a small group of
>>>people who at the end of the day are a friendship circle.
>>
>>Chris, you know well I'm not going to "foreclose debate" here. What Lou
>>does with his list is his own business.
>
>Noted. I think it is a strength of this list as a wider more authoritative
>forum. Those who withdraw from debate here have to consider whether that
>does not reflect on their own credibility.
>
>
>>My skepticism about the SDR issuance is this: the problems of Africa and
>>other poor countries are the result of their position in the world
economic
>>hierarchy. Little is produced in Africa and much has been extracted.
>>Printing SDRs won't do a damn thing to change that situation.
>
>Right. That clarifies your position more. I would say, and this is a
>hypothesis, that the fundamental cause of the process of unqual exchange is
>inherent in the great difference in levels of productivity. Therefore what
>an area like Africa needs above all, rather than charity, is the
>opportunity to use the latest technology and knowledge. Using it will
>present considerable difficulties of course, but would be the most useful
>form of aid rather than just annulling debts periodically. Ideally I would
>have thought they need centres for maximum access to intellectual property
>plus intermediate technology. EG Gates should spend some of his charity
>billions on say 3 centres of high info tech in Africa.
>
>
>
>>>Whatever figures Barkley produces on SDR's, what is so controversial
about
>>>the idea that the IMF might be asked kindly to consider throwing a few
>>>billion into the Balkans. If the US can run a war its way without United
>>>Nations approval, what is to stop it leaning ever so nicely on the IMF?
>>
>>The IMF and World Bank will almost certainly "throw a few billion into the
>>Balkans." It will almost certainly be in the form of loans, not grants.
>>That you could think otherwise is why I repeatedly ask you what planet
>>you're on.
>
>OK. That is our difference. I predict a mixed package. Some will be in the
>form of outright gifts for some worthy cause such as learning Microsoft
>software, others will be repayable loans.
>
>
>
>>>The other objection was that there was no political or economic reason
why
>>>it would be in the west's interests to arrange a Marshall Aid plan for
the
>>>Balkans, because Communism has been defeated. Absolutely the reverse.
Late
>>>capitalism requires large, stable supranational states with human rights
>>>for citizens regardless of race, colour or religion.
>>
>>What, like the EU? That's not a supranational state, it's just a central
>>bank with pretentions. Europe is still constituted of states, largely
>>figured as ethnically defined nations. If you think otherwise, ask a Turk
>>in Germany or a Pakistani in Britain.
>
>Yes I clearly differ here. Modern big business requires the European
>superstate. It is true that in form it still is composed of different
>countries but they are now expert at equilibrating their policies. The
>headlines are always about arguments. The underlying process is
>convergence, which takes place *through* the arguments.
>
>
>>>4) Those who dismissed my previous posts muddled up my prediction of a
>>>Marshall Aid plan for the Balkans with my advocacy of a Marshall Aid plan
>>>for Africa. The two are not the same. About Africa, it is an informed
view
>>>in international financial circles that Africa is peripheral to the world
>>>economy that matters. Africa could fall off the map and the world would
>>>still keep turning.
>>
>>Just try to get the G7 to forgive African debt, much less launch a
Marshall
>>Plan. We're now going through yet another reworking of the HIPC (highly
>>indebted poor country) initiative at the G7 summit. If anything
significant
>>emerges from this go-round, I'll publicly apologize to you, Chris.
>
>And I would happily accept. What I appreciate is arguing this through now.
>
>My reply here is that we will achieve more on this occasion by raising our
>sights. Often I am critical of leftism that is deliberately out of touch
>with the realities of power. On this subject there is of course no moral
>reason why anyone should not call for a process of systematic
>redistribution that counteracts the centripetal processes of global
>capitalism. Soros himself argued this specific point.
>
>By restricting the debate to debt relief, we are always asking for charity
>for these poor incompetent blacks who somehow cannot earn an honest buck
>and keep on getting into debt.
>
>Only a political demand that challenges the inequality of the global
>capitalist system can shift the campaign onto the offensive. I doubt if we
>would lose any christians in the process. A campaign for world economic
>justice might find it easier to make progress than a campaign for world
>charity. Especially if it was also linked into to a progressive fund for
>the protection of the environment.
>
>What better way to use deficit financing on a global scale?
>
>Chris Burford
>
>London
>
>
>PS This post was delayed by a communication failure.
>
>Barkley has posted again on the subject of SDR's and cannot locate data on
>their issuance, but the essential point where his assumptions and mine
>differ is this:
>
>> SDRs do exist as a
>>unit of account that is fully backed up by the contributions
>>of the members of the IMF according to a formula.
>
>I am assuming that SDR's can be printed (in certain circumstances) without
>being backed by other currency or gold. Even if they are backed they may
>only partially be backed. Even if they were 80% backed by other currency
>that would be a printing of some new money. Why on earth should the
>imperialist powers not do this if they want to? Most other state powers in
>history have debased currency when it suits them. If the major capitalist
>nations, as represented in the IMF want to debase international currency in
>a worthy cause, what eternal laws are higher than their own political will?
>
>I note by the way that this is not Doug's point of difference with me on
>SDR's.
>
>Deficit financing is possible on a global scale as well as a national
>scale. By definition deficit financing on a global scale does not
>disadvantage individual capitalist countries which national deficit
>financing has been discovered to do.
>
>Yes SDR's can be issued with more or less prudence. They can be issued in
>the interests of capitalism/imperialism. Or just, just, possibly, with a
>big enough political campaign, and taking advantage of contradictions
>between groups of capitalists, they might be issued in the interests of the
>people of the world, and of the world itself.
>
>Did not two authors point out that we have a world to win?
>
>CB
>
>
>
>
>
>