-Caveat Lector-
Copyright 1999 InterPress Service, all rights reserved.
Worldwide distribution via the APC networks.
*** 25-Jan-99 ***
Title: DEVELOPMENT-ASIA: IMF and World Bank, Twins in Trouble
By Boonthan Sakanond
BANGKOK, Jan 25 (IPS) - Under intense attack for their failures in
dealing with East Asia's economic crisis, the International
Monetary Fund (IMF) and World Bank (WB) are desperately launching
fire-fighting measures to ease the recession's social impact.
But critics fear that without adequate rethinking of the
policies they prescribe to governments, the twin multilateral
lending bodies may end up putting a 'human face' only to their
public image -- and not to the development process they promote.
At a World Bank-sponsored meeting in Bangkok over the weekend,
the two agencies along with delegates from the government and non-
governmental sector brainstormed about responses to the social
disaster created by the region's economic crisis.
They targeted action areas like employment generation,
protection of health and education services, tackling social
consequences at the city and community level and monitoring
poverty impact and income distribution.
In a curious shift away from its usual focus on macroeconomic
issues, the World Bank has identified small and medium enterprises
and microfinance institutions as institutions which can reach the
most number of affected people.
''Rampant unemployment and inflation have pushed millions of
households back into poverty. School attendance and health status
are under threat, and gender gaps may well widen again,'' said a
report by the Bank at the meeting.
The report expressed fears that unless something is done
quickly, East Asia's past success in poverty reduction and human
development could be undone.
Since July 1997, the Bank has pledged some 16 billion U.S.
dollars to the region and already disbursed more than 4 billion
dollars in structural adjustment loans, which Bank officials say
have strong social content.
In Indonesia, Thailand and South Korea, the three countries
hardest hit by the crisis, Bank funds are being used in job
creation projects, training for the unemployed, low-income health
insurance schemes, small-scale community projects and larger
municipal projects.
Bank project funds are also being used to set up a monitoring
system to evaluate the crisis' impact and of public action on the
poor.
''It is critical that social suffering is alleviated not only
for human reasons, but also for the sake of a rapid micro and
macroeconomic recovery,'' says Jean-Michel Severino, World Bank's
vice president for East Asia and Pacific.
He expects further deterioration of the social situation in the
coming year. Maintaining adequate levels of social spending, Bank
officials say, is the only way of containing the damage due to the
economic crisis.
Given its emphasis on social spending, it is not surprising
that the World Bank has openly clashed with the Fund, criticising
the latter for its imposition of tight fiscal and monetary
policies and cutbacks in state spending in the crisis' early
stages. These steps are believed to have worsened the situation.
In a rare admission of its fallibility, the IMF this month said
in a report it had ''underestimated the economic downturn and
misjudged the market response to its support programme for
Thailand, South Korea and Indonesia''.
But IMF officials defended the tight fiscal and monetary
policies they prescribed to governments in the region, saying they
were needed ''at the time to restore confidence and to prevent the
crisis-hit economies from plunging into an inflation-depreciation
spiral''.
Many Fund insiders believe that by publicly criticising these
policies, the World Bank is trying to isolate the IMF and to
distance itself from blame for responding poorly to the crisis.
''The (World) Bank was primarily responsible for designing and
monitoring the social protection components of the adjustment
programmes in Asia,'' said Peter Heller, IMF deputy director, at
the Bangkok meeting.
To some, his remarks seemed to imply it is the Bank that should
take major responsibility for the severity of the social crisis.
Heller added the Bank had spent ''many years and considerable
resources on Indonesia'', where social infrastructure has failed
to cope with the impact of the crisis.
Such public squabbling between the Bretton Woods twins further
undermines their credibility among social organisations and long-
time critics of the economic doctrine they prescribe.
''Reform of the IMF and World Bank is required so that
structural adjustment programmes promote good governance, respect
for human rights and core labour standards, increased employment
and poverty reduction, rather than current policies of
austerity,'' said a statement issued at the meeting by the
International Confederation of Free Trade Unions.
Critics also accuse the World Bank and IMF of having promoted
policies designed to undermine the role of the state in social and
economic activity -- in tune with the almost fanatic neo-liberal,
free-market theories that dominated government thinking in the
United States and Britain during the eighties.
Both agencies have been among strongest proponents of financial
liberalisation across East Asia -- a trend now believed to have
led to excessive dependence on foreign capital flows and
ultimately, the collapse of economies after nervous foreign
investors stampeded out of the region.
The IMF is also accused of furthering the United States' agenda
during the crisis by insisting that governments further open key
sectors like banking to foreign ownership.
In his new book 'A Siamese Tragedy', economist Walden Bello
quotes a U.S. senior commerce official as saying at the onset of
the Asian crisis: ''Most of these countries are going to go
through a deep and dark tunnel. But on the other end there is
going to be a significantly different Asia in which Americans have
achieved much deeper market penetration, much greater access.''
The World Bank and IMF have also been hit for lack of
transparency and lack of accountability to the large numbers of
people affected by their decisions.
Ironically, the two agencies are convinced the Asian crisis is
due to crony capitalism, corruption and lack of transparency --
and not to their misplaced policy prescriptions.
As one NGO critic puts it: ''In Indonesia even a long-time
dictator like Suharto had to wind up his rule because he messed up
the economy. But at the IMF and World Bank, no heads have rolled
for far greater mistakes they have committed with the entire
region's economy.'' (END/IPS/ap-dv-if/bs-ss/js/99)
Origin: Manila/DEVELOPMENT-ASIA/
----
[c] 1999, InterPress Third World News Agency (IPS)
All rights reserved
May not be reproduced, reprinted or posted to any system or
service outside of the APC networks, without specific
permission from IPS. This limitation includes distribution
via Usenet News, bulletin board systems, mailing lists,
print media and broadcast. For information about cross-
posting, send a message to <[EMAIL PROTECTED]>. For
information about print or broadcast reproduction please
contact the IPS coordinator at <[EMAIL PROTECTED]>.
** End of text from cdp:ips.english **
______________________________________________________
Get Your Private, Free Email at http://www.hotmail.com
DECLARATION & DISCLAIMER
==========
CTRL is a discussion and informational exchange list. Proselyzting propagandic
screeds are not allowed. Substance—not soapboxing! These are sordid matters
and 'conspiracy theory', with its many half-truths, misdirections and outright
frauds is used politically by different groups with major and minor effects
spread throughout the spectrum of time and thought. That being said, CTRL
gives no endorsement to the validity of posts, and always suggests to readers;
be wary of what you read. CTRL gives no credeence to Holocaust denial and
nazi's need not apply.
Let us please be civil and as always, Caveat Lector.
========================================================================
Archives Available at:
http://home.ease.lsoft.com/archives/CTRL.html
http:[EMAIL PROTECTED]/
========================================================================
To subscribe to Conspiracy Theory Research List[CTRL] send email:
SUBSCRIBE CTRL [to:] [EMAIL PROTECTED]
To UNsubscribe to Conspiracy Theory Research List[CTRL] send email:
SIGNOFF CTRL [to:] [EMAIL PROTECTED]
Om
