News and Update: Economists take a swipe at WB, IMF

NewAge, September 18, 2007

Economists have blasted international financial institutions like World Bank and IMF for their roles which often prove fatal, and demanded that IFIs should be asked to compensate for the damages caused by their wrong policy prescriptions. They made the harsh criticism of global lenders’ policies at a discussion on ‘transparency and accountability of international financial institutions’ organized by VOICE at the Dhaka Reporters’ Unity auditorium Monday. A number of economists, academics and development activists were present at the meeting arranged Voices for Interactive Choice and Empowerment, a social organisation.

Economist Anu Mohammad said the International Monetary Fund formulates policies for many countries, but does not take the responsibility for any fallout. ‘IMF should be made accountable for any harm to the society due to its policy prescription, and the people should compel it to compensate for the loss,’ he said. The professor of economics at Jahangirnagar University stated that IMF policies weaken the state machinery and reduce the role of the government as much as possible. ‘It is the civil face of global militarised operation as it does not oust the government by force but makes it weak both politically and economically,’ professor Anu Mohammad said, referring to the convention that sees Pentagon officials head the World Bank since its birth after the World War II, while the top job at IMF goes to Europe.

Anu said IMF always talks about supremacy of private sector, but the local businessmen have now become aware of the ill motive of the lending agency and reacted sharply to its excessive role in economic policies. ‘Businessmen now understand that IMF works for promotion of global capital, not for local investors.’ Beneficiaries of IMF and WB, who receive trainings abroad, get consultancy works or free Washington trips, argue that the country needs money from external sources for development, but they never give a clear picture of the lending agencies’ real intention.

He asked why the government continues the World Bank project when there are many easy technologies to contain arsenic problem in groundwater.

Professor Pias Karim of BRAC University warned that impacts of privatising financial and jute sectors will not be good. IMF preached interest rate hike for agriculture loans and devaluation of taka, but the both steps proved bad for the economy, he pointed out. Many countries are now rejecting the policies of multilateral lending agencies and the government here should follow the suit for the betterment of the society. Venezuela repaid all the loans to World Bank and vowed that it would never borrow from multilateral lending agencies, he cited.

Social activist Badiul Alam Majumder said the government should answer the fundamental question whether the country really needs foreign aid or not. Annual inflow of external fund hovers around $1 billion, while inward remittance rose to $6 billion and export incomes to about $10 billion last year. ‘If we can mobilise local resources, we do not need any foreign aid,’ he said.

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