If I implied that SDRs could only be issued in a one-to-one relationship with their backing currencies, I apologize. That certainly is not the case. But your posting makes it clear that they are limited in issuance by the availability of their backing currencies. As I have now repeatedly noted, that is not the case for euros.
Probably more important is Doug Henwood's point, which is connected again with the very nature of both the IMF and SDRs. The IMF only makes loans, not grants. The Marshall Plan was a plan of grants. So, the IMF and its SDRs are not going to be the vehicle of any serious "Marshall Plan for the Balkans," not without a complete restructuring and redefinition of the IMF and SDRs, which is not going to happen to accommodate this. 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: Thursday, April 29, 1999 4:16 AM Subject: IMF Special Drawing Rights.
>At 12:34 28/04/99 -0400, Barkley wrote:
>
>[thread title Re: Marshall Aid for Balkans, Africa]
>
>
>>Chris,
>> 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
>
>Barkley,
>
>One of the things I appreciate about your contributions is your attempt to
>provide evidence for your opinions. On this occasion I think you or we are
>seriously adrift, in referencing the precise detail.
>
>A simple web-search under Alta Vista for "Special Drawing Rights"
>immediately gets to the IMF's public information page.
>
>Obviously it is written for public consumption.
>
>I note too it has the manipulative psychology of the genteman's club: there
>is a suggestion that they suddenly found that 20% of members had not had
>any SDR's at all so they thought it was only decent to create some more for
>them. (Hidden control message: be good chaps, keep in with the rest of us,
>and we will look after you, provided you wait your turn like decent chaps
>do, and don't rock the boat too much.)
>
>
>But as for Barkley's contention that SDR's are all backed pound for pound,
>dollar for dollar, with deposits of already existing money, I can see no
>evidence for this. This is the fundamental point I am trying to clarify
>here. Of course I am not saying that SDR's literally are printed. I am
>saying that they create credit.
>
>The general way they are described is that they are distributed in
>proportion to the countries holdings.
>
>One paragraph appears to imply there may be a rule that 25% of the value of
>the SDR's must be deposited by the receiving country with the IMF. This is
>still a) at least a tripling of the reserve value of that some. b) It is
>actually a quadrupling because one of the things about credit creation is
>it provides rules for how you can count the same sum of money twice. So
>even the 25% covered by a deposit counts in its own right and the deposit
>counts too.
>
>SDR's *are* a procedure by which credit is created in the interests of the
>biggest capitalist/imperialist powers.
>
>
>Why are they not used more widely? I suggest because it is in the interests
>of the USA that they are only sort of top-up perks to the international
>financial system. The USA gets a free subsidy to the tune of at least 10 to
>20 billion dollars a year by having its deficit currency circulating world
>wide and held as security, because it is the main unit of international
>currency.
>
>It would be a revolutionary reform to demand that the IMF has a policy
>greatly to expand the issuance of SDR's to reverse the increase in the
>global circulation of dollars. Such a policy could have rules about how the
>sums are released at times counter-cyclical to the capitalist trade cycle
>and in such a way as to prioritise bids for humanitarian and environmental
>causes on a global scale.
>
>I am sure progressive US economists could work conscientiously to undermine
>US financial hegemonism, with a suitable plan, if they could overcome their
>revolutionary cynicism.
>
>Ridiculous?
>
>It is ridiculous to say that working people have a world to win.
>
>Chris Burford
>
>London
>
>