[stop-imf] TWN/Martin Khor reply to Camdessus at UNCTAD

[Robert Weissman]

Dear friends and colleagues

On 13 Feb, the day before his retirement as IMF director general, Michel
Camdessus made his last speech in office, at the UNCTAD X conference in
Bangkok.  He spoke about the need for a human development approach, and
the need to tackle poverty, health, education and the environment, and a
new development paradigm.

During the question time, Martin Khor of the Third World Network made a
critical comment on Mr Camdessus' speech.  It was the last question of the
session, so in a way it was the final comment by a civil society
organisation to Mr Camdessus during his IMF career.  After the comment was
orally presented there was loud applause from the audience of about 1500
delegates and NGO representatives.

Just before he made his speech, Mr Camdessus had received a cake on his
face from an American activist, an event that caused a sensation at UNCTAD
X itself and around the world through the media.

NGOs and many delegates too felt this incident and the comment made in the
hall were fitting send-offs to the IMF chief as the IMF had been blamed
for a policies that resulted in a generation of economic crisis and social
hardship across the developing world.

We attach below the text of the presentation which was written up after
the session.

A report of the session, and other reports on UNCTAD X are being sent on
separate files.

With best regards

Third World Network.



Intervention by Martin Khor (Director, Third World Network) during the
Session on Interactive Debate with Mr. Michel Camdessus (Managing
Director, International Monetary Fund), at UNCTAD X, on 13 Feb 2000.


It is almost "touching" to see Mr Camdessus at the end of his IMF career
apparently being "born again" as a human development advocate, talking
just now about the need for a new development paradigm that stresses
health, education, poverty alleviation, gender and the environment.  But
it would have been more convincing if he had first acknowledged the
central role of the IMF in generating the crises of poverty and
development in the first place.

In Africa and Latin America the IMF's structural adjustment policies had
caused severe health and education cutbacks and social crises, deep
recession and persistent poverty, for a whole generation.  In Asia, the
IMF helped create the conditions that led to the financial crisis (through
its advice to countries to rapidly liberalise their financial systems) and
once the crisis broke out the IMF magnified it.  Mr Camdessus and the IMF
introduced conditionalities such as high interest rates, tight money,
budget cutbacks and the sudden closure of financial institutions (before
putting forward a comprehensive plan for all financial institutions,
thereby undermining the confidence of depositers and causing capital
flight).  These policies led to economic collapse.

Yet Mr Camdessus does not admit nor does he vdraw the lessons of the IMF
mistakes.  Instead he continues to give advice to the victimised
countries, and using double standards as well, since the advice would have
applied better to the international players and institutions that
primarily caused the crisis.

He said the reform of the affected countries is not over.  But he forgot
to say that the much needed reform of the international financial system
has not even started.  He asked for transparency in developing countries,
but did not call for the much needed transparency and strict regulation of
the financial markets and big market players like hedge funds and
investment banks that have manipulated currencies and stock markets and
transferred billions of dollars from the victimised countries.

He spoke about cronyism and collusion in developing countries.  NGOs agree
this is a problem and have been fighting it.  But he ignored the root
cause of the international financial disorder and the wrong IMF policies,
namely the cronyism in the nexus between Wall Street, US Treasury and the
IMF Secretariat, what Professor Bhagwati called the Wall Street-Treasury
Complex in a US foreign policy journal.  This international cronyism has
put the interests of a few financial institutions and financiers ahead of
the interests of the economies and people of the world, in both North and
South countries, and is preventing the kind of reforms needed.

If Mr Camdessus is serious, he would have led a process of reforms.  That
would have included measures to curb speculators and the unrestricted flow
of short term funds;  to prevent the IMF from being made use of by
financial institutions and players and the US Treasury and other major
developed countries;  to change the discredited structural adjustment
policies;  to resolve the Third World debt problem;  and to change the
decision-making process in the IMF.  He talked about the need for
participation of the poor.  If he is serious the IMF should have at least
changed its distribution of quota shares so that developing countries own
at least 50 percent of the equity of the IMF and thus have a bigger say in
voting and in IMF policies.

If Mr Camdessus is serious about the need to shift to a new economic
paradigm, then in his retirement he should confess to his role in the
IMF's mistakes, admit the IMF's liability for the economic and social
losses of so many countries and people, and advocate for all the required
changes mentioned earlier.