IMF retreat spells good news

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Editoral, NewAge, September 20, 2007

The past few months – especially the last couple of weeks that a delegation of the International Monetary Fund was here – sections of the citizenry have been vocal in their protest against the government signing up to a new arrangement with the multilateral lending agency. A recent petition, and a subsequent rule from the High Court asking the military-driven interim government to explain the matter, has apparently prompted the IMF to back out of formalising its involvement in Bangladesh’s economic policies, at least for the time being.

Considering the IMF’s own admission that the much-criticised Policy Support Instrument would not be appropriate at the moment, we presume that it would not pressure the government to ‘volunteer’ for an enrolment in this programme. That the lending agency will not be formally involved, although there will be further visits and consultations, with the country’s economic policymaking is indeed a welcome bit of news. As we have repeatedly said, we do not believe the country requires IMF assistances or loans, nor its policy prescriptions or guidance, formal or informal. We have mentioned in this context that an increasing number of countries are pulling out of IMF programmes by paying back their debts early and refusing to renew their programmes with it. As a result, the IMF, which is supposed to promote financial stability and help countries with balance of payment crises, is itself in a financial crisis and thus desperate to retain its dominance over the developing world, a result of which is the new Policy Support Instrument that does not involve loans but includes similar assessments, consultations and prescriptions that have proved disastrous for many economies around the world.

We do not agree with the IMF claim that its involvement has helped countries to the point that they have graduated and do not anymore require its assistance since leaders of those countries, Vajpayee of India and Shinawatra of Thailand, have publicly stated how painful, burdensome and disastrous the its conditionalities had been. We agree with the stance of the critics of IMF policies. We believe the economists who have cautioned the incumbents against the loss of the country’s sovereignty over its economic policies. We believe the leaders of different chambers of commerce and business bodies, and the bankers who took a public stance against the IMF. These people are hardly ‘ill-informed rabble rousers’ but are quite well-informed and knowledgeable. They have rightly raised the alarm because the policies advocated by the IMF harm their interests at the cost of furthering the corporate interests of the North where it is based. We urge the incumbents to send out clear signals that it is not interested in any further arrangement that allows the lending agency’s involvement in our economic policies and thereby compromise our economic sovereignty.

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