An Australian Perspective
Edited by Mohamed Ariff, John H. Farrar and Ahmed M. Khalid
Chapter 13: Should We Stop the IMF from Doing What it Should Not Do? A Radical Idea
Ross P. Buckley 13.1 INTRODUCTION The International Monetary Fund (IMF) was established to facilitate the management of a global fixed exchange rate regime. That role largely disappeared in the 1970s. Since then the IMF has become the economic policy director of countries in crisis, a role it is ill-suited to serve, and which it has fulfilled poorly. This chapter reviews the IMF’s performance in managing the debt crisis of the 1980s, the East Asian crisis of the late 1990s, Argentina’s crisis of 2001, poverty in Africa generally, and its role in the recent global financial crisis. It considers how the IMF has served to promote and entrench the strong resistance of the global financial system to needed changes, and analyses the steps that need to be taken to reform the IMF, including removing the role of setting economic policy for developing nations in crisis. The IMF was founded, along with the World Bank, in 1945. In the words of its website, ‘It was established to promote international monetary cooperation, exchange stability, and orderly exchange arrangements; to foster economic growth and high levels of employment; and to provide temporary financial assistance to countries to help ease balance of payments adjustment.’1 This is a reasonable summary. But the website proceeds, ‘Since the IMF was established its purposes have remained unchanged but its operations – which involve surveillance, financial assistance, and technical assistance – have developed to meet the changing needs of its member countries in an evolving world economy.’ At best, this is spin,...
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