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US
congressional body proposed IMF, WB operation curbs
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March
10, 2000 WASHINGTON,
Mar 9: A US congressional commission proposed drastic curbs in the
operations of the World Bank and International Monetary Fund yesterday,
winning plaudits and brickbats for their radical ideas, reports Reuters. At
an acrimonious meeting presenting the report to the press and public,
commission chairman Allan Meltzer said the proposals outlined In the
124-page document would prevent the IMF from "micromanaging" the
economies of member states. But
economist Fred Bergsten, one of three analysts who put out a dissenting
opinion on the controversial report, said the suggestions would undermine
the world economy and hurt US economic interests. "The
majority proposals would sharply Increase the risk of International
economic disorder and dash the prospects of economic development for
millions of poor people," he said. The
report, whose authors Included long-term critics of the IMF, Is part of a
review Initiated in 1998 when Congress approved the US share of higher
quotas at the IMF. Congressional
leaders might try to include some Ideas in legislation. But change at the
two Institutions will depend on the response from other member states as
well. The
United States has 18 per cent of the votes at the IMF and the World Bank,
enough to make other countries listen, but not enough to force sweeping
policy change. The proposals from the commission would only allow the IMF
to provide short-term credits, lending to fewer countries than at present.
And they would stop the World Bank from lending to countries that can
raise cash on private markets. Congress
plans hearings on the report on March 23, with testimony from Treasury
Secretary Lawrence Summers and from commission members. But
House Democratic leader Richard Gephardt said the report took "a
slash and burn" approach to the International financial institutions
it was mandated to investigate. "The
authors of the majority report claim to advocate reform for the purpose of
strengthening the IMF and the World Bank," he said. "In reality
they aim to weaken the resources and undermine credibility of these
institutions." Many
In Congress have long been critical of the IMF, arguing that its policies
make financial crises worse, or that they neglect workers' rights. The
World Bank, which would lose most of its existing functions if the
proposals were ever implemented, has also come in for Congressional
criticism. World
Bank media chief Caroline Anstey said the commission's "faulty
recommendations" were based on flawed data. "While we welcome
review of the bank's work by both our supporters and our critics, we find
the results of this particular review very disappointing," she said. The
bipartisan commission agreed unanimously on two points in the report — a
call to multilateral lenders to forgive the debts owed to them by some of
the world's poorest countries, and to limit IMF lending to
"short-term liquidity loans." Development
groups welcomed the idea of debt relief, but said the report failed to
address fundamental problems at the bank and the fund, which both played
major roles In efforts to resolve the world financial crisis of 1997-99. "A
committee dominated by neo-liberal Republicans is calling for outright
debt cancellation ... yet the IMF and World Bank will not put this
overwhelming consensus into action," said Anne Pettifer of debt
relief lobbyist Jubilee 2000. Source:
The Daily Star |