>I received this email (forwarded by a mutual friend) by a puzzled World
Bank
>employee who seems completely stunned by this massive anti-IMF/WB
movement.
>Thought I'd forward it to the All-Knowing Economists and Others on the LBO
>list to see if anyone might have some comments that might enlighten him.
Put me down as an "Other". The document, like so many of its kind, is a mixture of good sense and bollocks. When the lefties and greenies get a good hand, there's not a power on earth that can stop them overplaying it . . . . .
> >>1. IMF/World Bank structural adjustment programs have increased poverty
> >>around the world.
> >>
In order to believe this, you have to believe either that structural
adjust. programs were worse than obvious alternatives available at the
time. I'm not sure how defensible this is -- countries in receipt of SAPs
tend to have a lot of problems, and it's difficult to say that subsequent
problems are a result of the program, or a result of the fact that these
countries were so poor and indebted to begin with. Compared to being given
a lot of money as aid, an SAP is no good, but I don't think this is a
particularly interesting comparison.
A better case might be that IMF/WB lending has propped up some awful rulers, and enabled capital investment in the technology of repression. This certainly has made a lot of poor people poorer, and is probably responsible for most of the stagnation in Africa.
> >>
> >>2. IMF/World Bank "debt relief" for poor and indebted countries is a
>sham.
> >>
Yes, basically true. And all real debt relief has come as a result of
external pressure on these institutions.
> >>
> >>3. The IMF has helped foster a severe depression in Russia.
> >>
Again, hard to get the IMF off the hook on this one. I tend to hold a non-orthodox theory of what went wrong in Russia, in that I don't think that the botched privatisation program had much to do with it -- I just don't see how having the productive assets controlled by *this* bunch of robbers instead of *that* bunch of robbers can put a country into a situation where 40% of the population don't have enough food to eat. I tend to think that it was the IMF's advice on monetary "reform" that really screwed things up.
I've never seen the Russian poverty figures called into question in this way before, and would regard any such criticism as quibbling, unless someone is actually trying to argue that things aren't Very Bad in Russia.
> >>
> >>4. The IMF helped create and worsen the Asian financial crisis.
> >>
Hmmmmmm, blahhhh, the IMF screwed up on this one, but so did everybody
else. The assumption underlying this point is that the optimal frequency
of crises is zero, which seems ridiculously conservative to me. All the SE
Asian economies which went into crisis are recovering, and even if you
accept that their openness to hot money made them vulnerable to crisis
(which seems reasonable), then a look at the development profile of
Thailand, Malaysia and S. Korea suggests that it was a risk well worth
taking.
On the question of "worsen", again you have to ask "worse than what"? Worse than doing their job properly? Undoubtedly. Worse than if there had been no IMF? Like heck.
> >>
> >>5. The IMF bails out big banks.
Yeh, but somebody has to bail out big banks. If you're going to have big banks, then you're going to have to bail them out every now and then. The optimal frequncy of crises is not zero.
> >>
> >>6. IMF/World Bank structural adjustment programs devastate the
> >>environment.
> >>
Would need convincing that third world elites wouldn't try to carry out all the ideas mentioned whether or not there was an SAP in place. This criticism seems to boil down to the assertion that the IMF and World Bank provide finance to developing countries to help them indistrialise. WB has been a bit overkeen on logging in the past, though, and that point is well made.
> >>
> >>7. IMF/World Bank structural adjustment programs contribute to the
>spread
> >>of HIV/AIDS.
> >>
Weak as hell, and written in a way that suggests the author knows it. What has happened here is that someone with a bee in their bonnet has inserted the words "as a result of structural adjustment programs" into an otherwise interesting piece on development and AIDS. In general, a few of these points seem to have a message which is anti-development per se.
> >>
> >>8. IMF/World Bank structural adjustment programs harm women.
> >>
mainly ditto. I'm also beginning to notice that we're getting "cuts in budget spending, mandated by structural adjustment programs" repeatedly here, which seems to suggest that there would be no budget problem in the absence of the SAP -- in which case, why is this country borrowing from the IMF at all? Poor countries cut back spending because they are poor, not because the IMF randomly tells them to. Of course, they are poor because of their interest bill, and that is in large part the IMF's fault, but bad critiques don't support good ones.
> >>
> >>9. IMF/World Bank structural adjustment programs and Bank project loans
> >>have led to deforestation worldwide.
> >>
Yeh, WB has been a bit overkeen on logging projects
> >>
> >>10. World Bank policies have displaced millions of people around the
> >>world.
> >>
At the heart of this is a genuine criticism of the WB -- that they are size queens, with internal prestige based on the amount of loans you can write. Hence their love of big white-elephant projects, like dams &c
d^2
> >
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