The US labour leader, John Sweeney recently blasted the IMF for what he described as prescribing leeches to cure the plague. Given his clout, policy makers in IMF must feel somewhat embarrassed even as the SE Asian countries arm-twisted by the fund's bureaucracy have some cause for hope that Sweeney's remarks might help tone down the policy prescriptions for dealing with the current economic crisis. But then, it is not Sweeney who is going to stand guarantee for the massive debts run up by these countries. One must concede that IMF's standard recipe for BoP related problems is a bitter medicine, but without the `super financial watch dog' in the picture no creditor will be prepared to come to the rescue of debt-ridden economies.
This is not the first time that the IMF's bail-out package has evoked strong feelings and Sweeney is not the first person to air them. There have been riots before in response to cuts in public spending and subsidies resorted to under pressure from the IMF. It is also true thatthe strait-jacket of structural adjustment hasn't always worked to the advantage of the economies concerned, but the harsh reality is that without the fund's involvement nothing moves. A long time ago, the UNICEF in a blistering attack on IMF's policies blamed them for causing a set-back to its own efforts to take care of neglected children the world over. Pragmatism demands neither condemnation nor undue appreciation for what the IMF not only preaches but also lays down for governments coming to it with a beggar's bowl. The fund's intervention is prompted largely by the inefficiency in economic management of governments and the fund does not force itself unless necessary. IMF can be blamed for its insensitivity to pain, but the governments can hardly go scot free.
Copyright © 1998 Indian Express Newspapers (Bombay) Ltd.
