As the World Bank and IMF continue their annual meetings in Washington, DC, a number of groups say the two institutions are out of date and should be eliminated. They say the IMF, for example, has imposed economic policies on many developing countries that hurt the countries and benefit mostly multi-national corporations.
Soren Ambrose is with the Solidarity Africa Network. He’s in Washington for the World Bank/IMF meetings and spoke to English to Africa reporter Joe De Capua.
“The debate now focuses on the IMF, which as an institution has always had a narrow focus of trying to maintain economic stability in its member countries. But given the state of the global economy… the flow of money is so great that the IMF has a difficult time raising the kinds of funds that would be necessary to intervene in a major crisis, such as a currency crisis like the east Asian one of a few years ago. And because its track record in those crises has been so poor…we think that it’s pretty clear that their role really should be curtailed and in effect has been curtailed just by the march of events, because countries have taken precautions to avoid needing the IMF. And as they do that, the IMF by the same equation becomes less necessary.”
Asked whether African countries would be able to handle the economic fallout if the IMF were eliminated, Ambrose says, “I think so, yes. The IMF, although it does give loans to most African countries, in the scheme of the budgets, even of these relatively impoverished countries, the amounts that the IMF lends are not great. The main function of the IMF is as kind of a certifier of the economy, saying that they are following the rules that the global economy likes.”
But Ambrose does say some these would need to be retained. “We do need rules for the global economy, but they need to be rules that apply to everyone equally. What we need is a new structure that will make some guidelines about financing, about lending, about development that everyone will be following, rather than just the impoverished countries.