[Nasional-m] Paying heed to an insider's outspoken criticism of IMF

Thu Aug 22 10:12:11 2002

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Le Monde / Paying heed to an insider's outspoken criticism of IMF /=20

Paying heed to an insider's outspoken criticism of IMF

Editorial

Joe Stiglitz, a former chief economist with the World Bank, is perhaps =
less well-known in France for the 2001 Nobel Prize in economics he won =
for his theoretical work, along with two other American economists, on =
the imperfections of markets than he is for his outspoken criticism of =
the International Monetary fund.
He could hardly have timed his attack better. The meltdown in Argentina =
and the shock waves that it sent across neighbouring Latin American =
countries, coming just four years after the great Asian crisis, have =
lent a degree of legitimacy to Stiglitz's indictment of the IMF. The =
organisation seems to wield great power over the budgets of countries =
that are being crippled by debt.
Stiglitz's swingeing criticism is often played down by specialists. They =
point to the arrogance of a man who, as a member of the Clinton =
administration, was himself deeply involved in the exercise of American =
power that he denounces today. They know from experience that the most =
brilliant theoreticians do not always make the best practitioners, and =
are convinced that the antagonism between officials of the World Bank =
(where Stiglitz worked for four years) and their opposite numbers in the =
IMF (which he denounces) dates from the founding of the two =
Washington-based institutions.
Both institutions aim to remedy the imbalances of the world economy, but =
they perform sometimes contradictory tasks: the World Bank promotes =
programmes to combat poverty, while the IMF advises countries on what =
financial stabilisation policies they should adopt, often together with =
austerity measures.
But apart from the internal reforms that perhaps need to be thrashed out =
within the IMF, the fundamental questions posed by Stiglitz are central =
to the more general debate about Washington's relations with the rest of =
the world after September 11.
On the diplomatic and military stage the overwhelming superiority of the =
United States arsenal has fuelled accusations of unilateralism. On the =
international financial front, the US is also charged with =
unilateralism, as it is the only country in the IMF that has veto power, =
thanks to its 17% of voting rights. It is a case of the American =
superpower laying down its own rules on the rest of the world.
Things would be much simpler if the rules of the game were clear. But =
the events of the past few weeks and the u-turn that the White House =
forced its treasury secretary, Paul O'Neill, to make in Latin America - =
the US suddenly granted loans to Brazil and Uruguay, a practice he had =
earlier sworn was outdated - showed that Washington was in disarray.
The weakness of President Bush's team of economic advisers has become =
increasingly clear. Washington should decide on a strategy and explain =
it clearly to its partners. Even if we do not get the kind of =
wide-ranging debate that Stiglitz has called for, that would still be a =
step forward. August 14=20

The Guardian Weekly 22-8-2002, page 23

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<DIV><FONT size=3D2><FONT size=3D3>Le Monde / Paying heed to an =
insider's outspoken=20
criticism of IMF / <BR><BR><BR><BR>Paying heed to an insider's outspoken =

criticism of IMF<BR><BR>Editorial<BR><BR>Joe Stiglitz, a former chief =
economist=20
with the World Bank, is perhaps less well-known in France for the 2001 =
Nobel=20
Prize in economics he won for his theoretical work, along with two other =

American economists, on the imperfections of markets than he is for his=20
outspoken criticism of the International Monetary fund. He could =
hardly have=20
timed his attack better. The meltdown in Argentina and the shock waves =
that it=20
sent across neighbouring Latin American countries, coming just four =
years after=20
the great Asian crisis, have lent a degree of legitimacy to Stiglitz's=20
indictment of the IMF. The organisation seems to wield great power over =
the=20
budgets of countries that are being crippled by debt. Stiglitz's =
swingeing=20
criticism is often played down by specialists. They point to the =
arrogance of a=20
man who, as a member of the Clinton administration, was himself deeply =
involved=20
in the exercise of American power that he denounces today. They know =
from=20
experience that the most brilliant theoreticians do not always make the =
best=20
practitioners, and are convinced that the antagonism between officials =
of the=20
World Bank (where Stiglitz worked for four years) and their opposite =
numbers in=20
the IMF (which he denounces) dates from the founding of the two =
Washington-based=20
institutions. Both institutions aim to remedy the imbalances of the =
world=20
economy, but they perform sometimes contradictory tasks: the World Bank =
promotes=20
programmes to combat poverty, while the IMF advises countries on what =
financial=20
stabilisation policies they should adopt, often together with austerity=20
measures. But apart from the internal reforms that perhaps need to be =

thrashed out within the IMF, the fundamental questions posed by Stiglitz =
are=20
central to the more general debate about Washington's relations with the =
rest of=20
the world after September 11. On the diplomatic and military stage =
the=20
overwhelming superiority of the United States arsenal has fuelled =
accusations of=20
unilateralism. On the international financial front, the US is also =
charged with=20
unilateralism, as it is the only country in the IMF that has veto power, =
thanks=20
to its 17% of voting rights. It is a case of the American superpower =
laying down=20
its own rules on the rest of the world. Things would be much simpler =
if the=20
rules of the game were clear. But the events of the past few weeks and =
the=20
u-turn that the White House forced its treasury secretary, Paul O'Neill, =
to make=20
in Latin America - the US suddenly granted loans to Brazil and Uruguay, =
a=20
practice he had earlier sworn was outdated - showed that Washington was =
in=20
disarray. The weakness of President Bush's team of economic advisers =
has=20
become increasingly clear. Washington should decide on a strategy and =
explain it=20
clearly to its partners. Even if we do not get the kind of wide-ranging =
debate=20
that Stiglitz has called for, that would still be a step forward. August =
14=20
 The Guardian Weekly 22-8-2002, page=20
23 </DIV></BODY></HTML>

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