The Fund in Flux

September 15, 2006 8:25 AM

The Trade Surplus and the Olive Tree The International Monetary Fund (IMF) has seen its loan portfolio drop 73 per cent since 2003. Nobody seems to be defaulting on their loans lately, and there hasn't been a big bailout since 2001. The IMF's summit this week in Singapore will look at this issue and how to better the world balance of trade betweed the developing world and the industrial economies of the west. But is there really a place (warning: PDF) for the IMF in the trade agreements between China and the US?
posted by parmanparman (7 comments total)

Forget all that, what's Bono going to do with his free time now?
posted by ZenMasterThis at 8:28 AM on September 15, 2006

The IMF has faced a raft of criticism in recent years for being more motivated by U.S. interests than those of the nations it assists, and I wouldn't be surprised if that's made some nations more resistant to accepting its loans. I just read Confessions of an Economic Hitman, which tries to argue that the big banks (and the consulting firms they employ) exploit debtor nations basically in two ways. First, by convincing them to accept loans that are much larger than they need (and larger than they can repay) so as to give U.S. (and to a lesser extent the other European countries that influence the big development banks) leverage to later wring political favors. And (more convincingly, to me), by encouraging massive, unnecessary infrastructure investment that both provides lucrative contracts to U.S. corporations and makes the nations technically dependent on them. The book is pretty sensationalistic, and contains virtually no statistics to back its claims up, but it kinda jives with what Joseph Stiglitz wrote a few years ago after the IMF bailouts of Russia and southeast Asia.

Anyway, if the IMF tries to start mediating the trade imbalance between the U.S. and China, it won't do so as an unbiased participant.
posted by gsteff at 9:14 AM on September 15, 2006

gsteff, there was a book by (I think) Jonathan Kwitny, Endless Enemies, about 25 years ago that, in part, explained a lot of this -- it seems to be pretty pernicious, and although a lot of us hoped the end of the Cold War would improve things, it seems to have gotten worse.
posted by pax digita at 9:23 AM on September 15, 2006

The IMF: Loan Shark to the Developing world.

It wouldn't be so bad if they were just loaning money, but the money is tied to implementing half-cocked neo-con ideas about government which end up fucking up countries even worse then they were before, which then impedes their ability to pay.
posted by delmoi at 10:21 AM on September 15, 2006

Hugo Chavez has begun and proposed a program that could displace the influence of the IMF and break the Washington Consensus, at least in Latin America.
posted by euphorb at 3:32 PM on September 15, 2006

The spike in oil prices has allowed Venezuela to help countries like Argentina, Brazil and now Bolivia repay their IMF loans ahead of schedule by giving loans that don't obligate the countries to hand over their economic and social politics to the bloodless bankers at the IMF. This is a signficant shift in power in Latin America.
posted by sic at 1:55 AM on September 16, 2006

I find it striking: the Bretton Woods instruments were deployed to address and correct obvious economic problems, but the obvious idea of the necessary re-deployment of different and better macroeconomic instruments is met with a monkey-like snarling from the partisans who are in control... it's sick, really....
posted by sporb at 7:15 AM on September 16, 2006