Posts Tagged ‘IMF’

Jamaica, model of ‘expansionary austerity’


There is that island in the sun. But, first, a journey through turquoise waters of another tourist destination.

There we find a set of islands that comprise Greece. That country, a member of the ‘periphery’ (word of profound meaning), continues to experience its massive economic, social and emotional) Depression unleashed since 2007, in which Greek policies were not entirely blameless.

As member of the eurozone with the euro as its currency, Greece has had limited to nil options available with regard to monetary policy to deal with the economic catastrophe. Aside the fact that the country was integrated into the union with the feverish ‘connivance’ of now very ‘aggrieved’ parties. Lacking its sovereign currency, Greece could not resort to devaluation as a tool of monetary policy that might have allowed more flexibility, and minimised, or rather contained, the severity of the damage to the economy and the concomitant exacerbation of the country’s debt.  Paul Krugman, Simon Wren-Lewis, and others have also touched on this option, albeit unavailable, at the moment. (more…)


A Long Read – for that ‘free ride’ to ‘free trade’ and ICSID


The Guardian has another of its Long Reads.

This time the topic is the rise of the corporation, usually multinational corporation (MNC), to the level of, equivalent to the state and beyond. Countries that have had to face the World Bank to seek loans and technical assistance, and be subject to that well-known ‘structural adjustment’, are more than familiar with the mechanism called Investor-State Dispute Settlement (ISDS). In the case of the World Bank, the name is the more sophisticated-sounding, International Centre for Settlement of Investment Disputes (ICSID) – and not even deigning to use US-spelling of ‘Centre’. (more…)

The World Bank, the IMF, and the 21st Century


‘Structural Adjustment’. ‘Washington Consensus’. ‘Privatisation’. ‘Budget Cuts’. ‘Austerity’. On and on…

The World Bank and International Monetary Fund (IMF) hold their Annual Meeting this weekend.

As we know these two organisations are yet to have a non-Western director – the World Bank, always US, even though now the President is of South Korean extract; and the IMF, always a European, even if the President is now a French woman. Such an exceptional state of affairs has led to initiatives by major countries that see themselves treated as no more than second-class countries. The likelihood of the US ceding any control, its veto seems very low, to nil.

No surprise then that China, with fierce opposition from the US, has started its Asian Investment in Infrastructure Bank (AIIB), the BRICS, with their New Development Bank (NDB), both of which are to start operating within the year. Other factors have also led to disenchantment with these Western entities. Principal among these are perceptions that they more represent the interests of Western capital and finance, than those of the putative beneficiary countries. Sudden, severe economic and financial crises, especially from the eighties, had led many regional countries to rely on, even submit to multilateral development institutions, in particular the WB and the IMF, for assistance with development and debt challenges, with what seems to have been imperceptible benefits.

Fortunately economic fortunes of some countries would change, drastically and for the better, and for an extended period. Such benefits would enable Hugo Chavez of Venezuela, Lula da Silva of Brazil, and Nestor Kirchner of Argentina to become key in weaning most Latin countries off those institutions that had inflicted such social and economic damage on their countries. (more…)