IMF and the Global South
The International Monetary Fund (IMF) has been severely criticized in the Global South for its interventionist policies in the economies of many countries. It has also been criticized for not allowing the nation-states of the Global South to enjoy effective voice and vote in governance structures. Presently, the IMF is reviewing its role and many are speculating about the relevance and future of this Global Governance Institution.
The survey below was commissioned by the IMF and Paul Nehru Tennassee, who has monitored the policies of the IMF over the last eight years on behalf of the World Confederation of Labor (WCL), has come forth with the responses below.
1. (a) Which are the three global or national issues on which the IMF has a key role to play in the future? (b) What can the fund bring to the table on these issues? (c) How do you evaluate the fund as a source of knowledge and analysis on these issues?
PNT: Three issues are current account imbalances, financial stability and macro-economic policies that include the social fundamentals. On the second question – by cross country data and analyses. And thirdly, because many of the FUND staff lack civil society and private sector experience its analyses of issues have limitations. Though consultations with unions, CSOs [Civil Society Organizations] and private sector are done, recommendations, particularly from the former, are not incorporated in policy recommendations.
2. Do you see the necessity for a different role for the IMF in the global economy than it is playing today? Are there obstacles to the IMF playing this role? If so, what are they?
PNT: Lobby the northern governments to practice what they preach, e.g., open their markets to Global South agricultural products. Define an effective role for the IMF in the Global North. IMF ideology and policy prescriptions are perfect for the Global North but out of place in the Global South. It is like fitting “square pegs in round holes.” Upgrade the National, Central, Regional and Inter-Hemispheric Banks and diminish the role of the IMF. Support the establishment of an Asian Monetary Fund.
Yes! The Global North nation-states’ intentions are to maintain the Global South as neo-colonial outposts. It is a new form of re-colonialism. It should be replaced by shared governance. Then the IMF will be free to move forward.
3. The IMF conducts annual discussions with each country (bi-lateral surveillance; article 1V consultations). How useful do you think these discussions are? What are the benefits of the IMF playing this role?
PNT: It is useful because it provides knowledge on the economies of nation-states. However, in the Global South, data infrastructure urgently requires upgrading. This is because the IMF-WBG has failed to support financially Central Banks Research & Statistics Departments, Academics and CSOs in data collections and analyses. The IMF largely depends on governments’ information. Insufficient consultations are done with CSOs. Further, some governments treat the reports as secret documents. In the Global North, the reports are done but they do not influence policy. The reports should be significantly outsourced to the institutions and researchers in the Global South.
4. The IMF reports regularly on the state of the global economy and financial markets, and highlights global problems that need to be addressed (“multilateral surveillance” reported through the World Economic Outlook and the Global Financial & Stability Report). How important do you think it is for the IMF to play this role?
PNT: These are two good flagship publications and are useful. However on occasions, the WEO [World Economic Outlook] advances sectarian ideological positions disguised as policy analyses regarding the Labor Market Policies. The publications cannot be the only instruments for “surveillance”. The financial centers in the Global North will have to be more forthcoming with information. This will not be easily achieved since global capital flows escape the Financial Institutions’ mechanisms that have been so far designed to achieve effective surveillance.
5. The IMF gives financial loans to countries to help tide them over financial difficulties. How important will this role be in the future? Can you cite 1 or 2 examples (at the national or global level) of where you think the IMF’s work has made a difference? (In other words, can you cite IMF “success stories?) Can you also cite 1 or 2 examples of where the IMF’s work has led to bad outcomes? (In other words, can you site IMF “mistakes?”)
PNT: For success stories the IMF should speak for itself. However, the mistakes of the IMF during the Asian Crisis, 1997 & 1998, were exhaustively documented. Recently, the IMF in a report recognized that advising countries to liberalize their economies when they do not have developed capital markets is an error. IMF has done that in the past. Imposed privatization policies in the Global South was riddled with garage sales, corruption and private sector monopolies that replaced state monopolies particularly in the essential services, such as education, etc. Consequently, poverty eradication policies were undermined.
6. What role do you think the IMF can and should play in advanced/industrialized countries?
PNT: This has been answered earlier on in this survey.
7. What role could and should the IMF play in the emerging markets?
PNT: When the IMF tried to establish the Sovereign Debt Mechanism the emerging markets’ nation-states did not support the IMF proposals. Emerging economies have paid their debts as in the case of Argentina and Brazil, and Asian nation-states are building up their reserves so that they do not have to depend on the IMF. Hence, the IMF should re-think its role.
8. What role should the IMF play in low income countries?
PNT: This may be more appropriate within the mandate of the World Bank Group. IMF complicates development with in appropriate overemphasis on Macro Economic Fundamentals unrealistically, and continues to subtly impose conditionalities.
9. Do you think all countries feel a “sense” of ownership of the IMF? If not, what can the IMF do to increase ownership?
PNT: The G7 (and G8) has ownership. The G77 and others do not. Ownership is only possible if all countries have effective voice and vote. Most of the Global South nation-states are clients of the International Financial Institutions.
10. How would you describe your interactions with the IMF? What is the quality of these interactions? In other words, if you engage generally through, for instance, press conferences, are these valuable? Workshops? Etc.? If not, what would make these interactions more valuable? Would you prefer different kinds of interactions that you think are currently not available? What are your objectives generally when interacting with the IMF? Are your objectives usually met? In other words, are the workshops, press events, speeches, etc. meeting your information/ interaction needs? Are you interested in more, or less, interaction with the IMF? Or about the same level? If more, in what format (More web-based products; more face-to-face interaction; more publications; more products in languages other than English?)
PNT: WCL at annual meetings had press credentials. However, the IMF took that “privilege” away. Since then, attending annual meetings is a bore. Besides, the highest leadership of the labor movement cannot access any meetings. During the year, there is access to staff. This is useful because they provide information and are always willing to engage in dialogue. The workshops with trade unions are extremely useful. Labor’s objective is to influence policy shifts that are sensitive to workers interests and rights. However, the IMF does not respond to labor’s policy recommendations. They listen but it goes through their ears. We are often reminded that the IMF is an inter-governmental organization and unions are not governments. The value of the dialogue and interaction is the acquisition of knowledge on how the IMF works and contributes to financial and development policies that affect workers. It is comparable to the men and women who led the anti-colonial struggles in their countries. Many studied in the capitals of the colonizers to become knowledgeable on how colonial master think and formulate policies. Similarly, studying the IMF advances unions’ and workers’ cause. There should be a significant decentralization of interaction to the regional, sub-regional and national levels. Assist the union financially to obtain computers, to do their own capacity building in computer and globalization literacy, so that they can access IMF info and dialogue with the IMF at the levels mentioned previously.
11. In your opinion, which are the IMF’s most important stakeholders that the institution should focus most of its energy and attention on? Why? Are there groups to which the IMF devotes too much attention? List the groups: (1) Govt. Parliamentarians (2) Academia & Think Tanks (3) Media (4) Business (5) CSOs & Unions.
PNT: The invisible majority of people and their representatives who feel the impact of IMF’s Policies should be given priority.
12. Do you think there is value in the IMF seeking more feedback from stakeholders such as yourself? Why? Does the IMF seek enough feedback on its work from stakeholders? If not, what are some of the ways in which it can seek more feedback?
PNT: What is the use seeking feedback from CSOs like Unions if the IMF ignores their policy recommendations. It is a practice of symbolic democracy.
13. Do you view the IMF as a listening organization that responds to feedback from its stakeholders? If so, why? What examples have you seen of the IMF as a listening organization. If you do not consider the IMF a listening organization, should it be more of a listening organization? If so, what would be the benefit?
PNT: These questions were answered in question 11!
14. Do you think the IMF should be doing more to inform stakeholders such as yourselves about its work on a regular basis? What is the value of more information in the public arena? If you believe the IMF should provide more information, how can it do so effectively?
PNT: There is always room for increase in quality of information and, the more public it is, the better, since transparency and accountability are vital for the life of democratic societies and also a prerequisite for sustainable development.
15. What do you consider the obstacles to the IMF developing stronger relationships with important stakeholder groups?
PNT: Governments’ resistance, particularly, from the Global South.
16. What is the risk of not strengthening and improving relationships with these groups?
PNT: Alienation of the invisible majority and their representatives and the undermining of IMF credibility as an intergovernmental global institution established to serve justly and fairly the citizens of the world with a view to eradicate poverty and contribute to sustainable development and respect for human rights.
Paul Nehru Tennassee is the Director of International Affairs at the University of the District of Columbia, Washington DC; Adjunct Professor on Globalization: Problems & Challenges; and Host of the Washington DC Carib-Nation TV Program.
The International Monetary Fund (IMF) has been severely criticized in the Global South for its interventionist policies in the economies of many countries. It has also been criticized for not allowing the nation-states of the Global South to enjoy effective voice and vote in governance structures. Presently, the IMF is reviewing its role and many are speculating about the relevance and future of this Global Governance Institution.
The survey below was commissioned by the IMF and Paul Nehru Tennassee, who has monitored the policies of the IMF over the last eight years on behalf of the World Confederation of Labor (WCL), has come forth with the responses below.
1. (a) Which are the three global or national issues on which the IMF has a key role to play in the future? (b) What can the fund bring to the table on these issues? (c) How do you evaluate the fund as a source of knowledge and analysis on these issues?
PNT: Three issues are current account imbalances, financial stability and macro-economic policies that include the social fundamentals. On the second question – by cross country data and analyses. And thirdly, because many of the FUND staff lack civil society and private sector experience its analyses of issues have limitations. Though consultations with unions, CSOs [Civil Society Organizations] and private sector are done, recommendations, particularly from the former, are not incorporated in policy recommendations.
2. Do you see the necessity for a different role for the IMF in the global economy than it is playing today? Are there obstacles to the IMF playing this role? If so, what are they?
PNT: Lobby the northern governments to practice what they preach, e.g., open their markets to Global South agricultural products. Define an effective role for the IMF in the Global North. IMF ideology and policy prescriptions are perfect for the Global North but out of place in the Global South. It is like fitting “square pegs in round holes.” Upgrade the National, Central, Regional and Inter-Hemispheric Banks and diminish the role of the IMF. Support the establishment of an Asian Monetary Fund.
Yes! The Global North nation-states’ intentions are to maintain the Global South as neo-colonial outposts. It is a new form of re-colonialism. It should be replaced by shared governance. Then the IMF will be free to move forward.
3. The IMF conducts annual discussions with each country (bi-lateral surveillance; article 1V consultations). How useful do you think these discussions are? What are the benefits of the IMF playing this role?
PNT: It is useful because it provides knowledge on the economies of nation-states. However, in the Global South, data infrastructure urgently requires upgrading. This is because the IMF-WBG has failed to support financially Central Banks Research & Statistics Departments, Academics and CSOs in data collections and analyses. The IMF largely depends on governments’ information. Insufficient consultations are done with CSOs. Further, some governments treat the reports as secret documents. In the Global North, the reports are done but they do not influence policy. The reports should be significantly outsourced to the institutions and researchers in the Global South.
4. The IMF reports regularly on the state of the global economy and financial markets, and highlights global problems that need to be addressed (“multilateral surveillance” reported through the World Economic Outlook and the Global Financial & Stability Report). How important do you think it is for the IMF to play this role?
PNT: These are two good flagship publications and are useful. However on occasions, the WEO [World Economic Outlook] advances sectarian ideological positions disguised as policy analyses regarding the Labor Market Policies. The publications cannot be the only instruments for “surveillance”. The financial centers in the Global North will have to be more forthcoming with information. This will not be easily achieved since global capital flows escape the Financial Institutions’ mechanisms that have been so far designed to achieve effective surveillance.
5. The IMF gives financial loans to countries to help tide them over financial difficulties. How important will this role be in the future? Can you cite 1 or 2 examples (at the national or global level) of where you think the IMF’s work has made a difference? (In other words, can you cite IMF “success stories?) Can you also cite 1 or 2 examples of where the IMF’s work has led to bad outcomes? (In other words, can you site IMF “mistakes?”)
PNT: For success stories the IMF should speak for itself. However, the mistakes of the IMF during the Asian Crisis, 1997 & 1998, were exhaustively documented. Recently, the IMF in a report recognized that advising countries to liberalize their economies when they do not have developed capital markets is an error. IMF has done that in the past. Imposed privatization policies in the Global South was riddled with garage sales, corruption and private sector monopolies that replaced state monopolies particularly in the essential services, such as education, etc. Consequently, poverty eradication policies were undermined.
6. What role do you think the IMF can and should play in advanced/industrialized countries?
PNT: This has been answered earlier on in this survey.
7. What role could and should the IMF play in the emerging markets?
PNT: When the IMF tried to establish the Sovereign Debt Mechanism the emerging markets’ nation-states did not support the IMF proposals. Emerging economies have paid their debts as in the case of Argentina and Brazil, and Asian nation-states are building up their reserves so that they do not have to depend on the IMF. Hence, the IMF should re-think its role.
8. What role should the IMF play in low income countries?
PNT: This may be more appropriate within the mandate of the World Bank Group. IMF complicates development with in appropriate overemphasis on Macro Economic Fundamentals unrealistically, and continues to subtly impose conditionalities.
9. Do you think all countries feel a “sense” of ownership of the IMF? If not, what can the IMF do to increase ownership?
PNT: The G7 (and G8) has ownership. The G77 and others do not. Ownership is only possible if all countries have effective voice and vote. Most of the Global South nation-states are clients of the International Financial Institutions.
10. How would you describe your interactions with the IMF? What is the quality of these interactions? In other words, if you engage generally through, for instance, press conferences, are these valuable? Workshops? Etc.? If not, what would make these interactions more valuable? Would you prefer different kinds of interactions that you think are currently not available? What are your objectives generally when interacting with the IMF? Are your objectives usually met? In other words, are the workshops, press events, speeches, etc. meeting your information/ interaction needs? Are you interested in more, or less, interaction with the IMF? Or about the same level? If more, in what format (More web-based products; more face-to-face interaction; more publications; more products in languages other than English?)
PNT: WCL at annual meetings had press credentials. However, the IMF took that “privilege” away. Since then, attending annual meetings is a bore. Besides, the highest leadership of the labor movement cannot access any meetings. During the year, there is access to staff. This is useful because they provide information and are always willing to engage in dialogue. The workshops with trade unions are extremely useful. Labor’s objective is to influence policy shifts that are sensitive to workers interests and rights. However, the IMF does not respond to labor’s policy recommendations. They listen but it goes through their ears. We are often reminded that the IMF is an inter-governmental organization and unions are not governments. The value of the dialogue and interaction is the acquisition of knowledge on how the IMF works and contributes to financial and development policies that affect workers. It is comparable to the men and women who led the anti-colonial struggles in their countries. Many studied in the capitals of the colonizers to become knowledgeable on how colonial master think and formulate policies. Similarly, studying the IMF advances unions’ and workers’ cause. There should be a significant decentralization of interaction to the regional, sub-regional and national levels. Assist the union financially to obtain computers, to do their own capacity building in computer and globalization literacy, so that they can access IMF info and dialogue with the IMF at the levels mentioned previously.
11. In your opinion, which are the IMF’s most important stakeholders that the institution should focus most of its energy and attention on? Why? Are there groups to which the IMF devotes too much attention? List the groups: (1) Govt. Parliamentarians (2) Academia & Think Tanks (3) Media (4) Business (5) CSOs & Unions.
PNT: The invisible majority of people and their representatives who feel the impact of IMF’s Policies should be given priority.
12. Do you think there is value in the IMF seeking more feedback from stakeholders such as yourself? Why? Does the IMF seek enough feedback on its work from stakeholders? If not, what are some of the ways in which it can seek more feedback?
PNT: What is the use seeking feedback from CSOs like Unions if the IMF ignores their policy recommendations. It is a practice of symbolic democracy.
13. Do you view the IMF as a listening organization that responds to feedback from its stakeholders? If so, why? What examples have you seen of the IMF as a listening organization. If you do not consider the IMF a listening organization, should it be more of a listening organization? If so, what would be the benefit?
PNT: These questions were answered in question 11!
14. Do you think the IMF should be doing more to inform stakeholders such as yourselves about its work on a regular basis? What is the value of more information in the public arena? If you believe the IMF should provide more information, how can it do so effectively?
PNT: There is always room for increase in quality of information and, the more public it is, the better, since transparency and accountability are vital for the life of democratic societies and also a prerequisite for sustainable development.
15. What do you consider the obstacles to the IMF developing stronger relationships with important stakeholder groups?
PNT: Governments’ resistance, particularly, from the Global South.
16. What is the risk of not strengthening and improving relationships with these groups?
PNT: Alienation of the invisible majority and their representatives and the undermining of IMF credibility as an intergovernmental global institution established to serve justly and fairly the citizens of the world with a view to eradicate poverty and contribute to sustainable development and respect for human rights.
Paul Nehru Tennassee is the Director of International Affairs at the University of the District of Columbia, Washington DC; Adjunct Professor on Globalization: Problems & Challenges; and Host of the Washington DC Carib-Nation TV Program.
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