Views & Commentaries
Brazil and the IMF
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Joseph Stiglitz appears to believe that if you repeat something often enough, it becomes a fact. It is unfortunate that you have been reporting his delusions as fact, most recently in "L'échec du FMI" (August 14).
It is a myth that the IMF is a puppet of the rich countries. The tradition at the IMF is just the reverse. Frenchman Pierre-Paul Schweitzer, when he ran the IMF in the early 1970s, sacrificed his own reappointment to warn that the United States could not have guns and butter without inflation and that Germany could not afford the social programs of the time without unrealistically high growth—a lesson both countries finally learned the hard way. Today, the IMF criticizes the U.S. over steel tariffs and the Farm Bill. Indeed, the IMF has taken up the cause of developing countries against protectionism throughout the industrialized world, including Europe's highly-subsidized agriculture.
It is also a myth that the IMF promotes the interests of bankers. Investors lost as much as $300 billion in Asia and Russia in 1997-98 despite the so-called IMF bailouts. And the IMF is working out the details of a proposal to allow countries to negotiate write-downs of their international bonds. The recent $30 billion package for Brazil is not about banks, but about giving Brazil a chance to prevent a crisis from enveloping its people. Stiglitz himself has written widely that Brazil deserves a chance to overcome its present troubles. Argentina, in contrast, has failed to take many such chances. The IMF could not protect the Argentine people from the follies of their leaders forever, as your reporter seems to suggest. But whether bankers gained or lost in the process was of little concern.
In Prof. Stiglitz's imaginary world, countries in crisis could sell more of their unwanted debt, a collapsing Soviet Union could have implemented gradual reform and the IMF is responsible for almost all the failings of globalization. Really!
IMF EXTERNAL RELATIONS DEPARTMENT