Sixty years after the founding of the International Monetary Fund and World Bank, the two institutions say they have helped eased poverty and stabilise the world economy, but some critics say they have done more harm than good.
Created in 1944 to avoid a repeat of the economic policies that triggered the Great Depression, the IMF and the World Bank mark their 60th anniversaries this year amid protests that will urge them to write off Third World debt.
Critics of the organisations argue that poor nations are buckling under crippling debts owed to the institutions, but the IMF argues it has helped many countries climb out of poverty.
"If you take that period of time (60 years), the world economy as a whole has enjoyed an economic growth never before realised in world history," said Anne Kreuger, the IMF acting managing director, ahead of the IMF and World Bank spring meetings this weekend.
The two organisations, she argued, have helped oversee a period of "liberalisation of trade, higher living standards, life expectancy, educational training, any measure you name - not just income."
Kreuger said the international co-operation fostered by the IMF helped curb the rampant inflation of the 1970s and made a more stable global economic environment.
The IMF and the World Bank grew out of a UN conference in 1944 at Bretton Woods, New Hampshire. Forty-five governments represented at the conference agreed to build an economic framework for co-operation to help avert the problems of the 1930s.
But critics argue the IMF have done little to alleviate severe poverty and may have made conditions worse by imposing tough conditions on aid.
Mark Weisbrot, co-director of the left-leaning Center for Economic and Policy Research, said the IMF worsened the Asian financial crisis of 1996-97, among others.
"The Fund proceeded to pour gasoline on the flames by insisting that these countries raise interest rates (as high as 80 percent in Indonesia) and cut spending while their economies were shrinking," he said.
"The crisis then spread to Russia, Brazil and Argentina, and the IMF chased after it with more wrong advice and tens of billions of dollars in loans ... The IMF could hardly have been more wrong if it had tried to be."
Global Exchange, an anti-globalisation and human rights group, argues that the IMF-World Bank economic formula "has exacerbated poverty in most countries where it has been applied, contributing to the suffering of millions and causing widespread environmental degradation."
The group maintains that economic reforms required for IMF aid "helped create a net outflow of wealth from the developing world, which has paid out five times as much capital to the industrialised countries of the North as it has received."
The IMF said such criticisms are without merit.
"Even if we still have many poor people and even if we have a lot to do, what we are forgetting is where we were at 50 years ago," Kreuger said.
IMF and World Bank officials point to the Heavily Indebted Poor Countries (HIPC) initiative back in 1996, that has sharply reduced debt to over 20 impoverished counties, mainly in Africa.
"Certainly it's true that poverty exists in the world, but the Fund is firmly committed to doing whatever it possibly can to try to encourage the appropriate policies and do the right thing to get countries on a sustainable growth path so that they can reduce poverty," IMF spokesman Bill Murray said.
Comments
Comments are closed.