Monday, October 05, 2009

Alternative voices on the Bank and Fund

Local civil society groups, academics and students have organised an alternative conference, Critical Voices on the World Bank and IMF and the World in Crisis, at Bilgi University in Istanbul, shadowing the official meetings taking place this week.

The conference is providing some refreshingly different perspectives from much of the programme at the official conference centre. Yesterday saw presentations on the IMF and its role in Turkey, as well as other emerging and developing countries. Professor Erinc Yeldan gave a detailed analysis of the impact of IMF conditions on Turkey, where inflation has been pushed down, but interest rates continue to hover high, unemployment is soaring and the public debt is huge. He pointed out that the Fund’s growth model is based on capital inflows and a growing financial sector, not growth in the real, productive, job-creating economy.

Professor Robert Wade from the London School of Economics was in town to give his perspective on the IMF’s logic that markets are 'efficient' - this means the aim of their programmes is to impose domestic austerity in order to restore investor confidence, because the financial markets will make 'correct judgements' about the situation on the ground once stability is restored. As well as questioning this logic, Wade pointed to the issues that have been masked and ignored by following it, for example the huge income inequality, both within countries and globally. This inequality means most people have less income, so demand stagnates, while the super rich put their wealth in the money markets, creating grand casinos of ultimately deadly fragility.

Nuria Molina, new director of Eurodad, talked about whether the IMF has really changed, as their PR would have us believe. Certainly they have removed some conditions and been more flexible in the downturn. But the harsh macroeconomic conditions are still there – if put off until next year in some places. And there is even evidence of the old structural conditions that are supposed to have been abolished – she gave examples of conditions imposing trade liberalisation in the Republic of Congo, privatisation in the energy sector in Kyrgyz Republic, and removing fuel subsidies in Ethiopia.

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