[stop-imf] camdessus session at unctad x (fwd)

[Robert Weissman]

A tragi-comedic report from Chakravarthi Ragavan on Camdessus's final
official appearance:

SUNS  #4606   Tuesday   15  February   2000

south-north development monitor   SUNS [Email Edition]

twentieth year 4606    tuesday    15   february     2000

contents


Finance: 'What Washington Consensus? I never signed any'- Camdessus
    (Chakravarthi Raghavan, Bangkok)

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FINANCE: 'WHAT WASHINGTON CONSENSUS? I NEVER SIGNED ANY'- CAMDESSUS

Bangkok, 13 Feb (Chakravarthi Raghavan) -- "What Washington Consensus, I
never signed any," Michel Camdessus, IMF Managing Director, said Sunday at
UNCTAD-X in one of its 'inter-active sessions' in responding to an NGO
representative - Martin Khor of the Third World Network.

In 1988, soon after Michel Camdessus took over as Managing Director of the
International Monetary Fund, UNCTAD's then Secretary-General late Kenneth
Dadzie went to visit him in Washington DC, on a Sunday, to discuss with
him the Third World Debt crisis and the UNCTAD view on the need for
writing down the debts owed by countries to private banks.

Camdessus, Dadzie told this writer on return, agreed with many of UNCTAD's
analysis on the debt issues, but said this was a thought he could afford
to have only on a Sunday!

Well, Camdessus came to Bangkok at the invitation of UNCTAD
Secretary-General Rubens Ricupero to address the tenth session and
participate in an interactive meeting, and spoke at the Conference on
Sunday, a day before his laying down office as the IMF head.

The Sunday and the imminent retirement perhaps encouraged him to say some
things at UNCTAD-X that is not normally IMF language, mixed, though, with
many of shop-worn cliches in IMF armoury:

"Now we know, it is not enough to increase the size of the cake. How the
cake is shared is equally relevant to the dynamics of development." Well,
some lessons in development economics after 12 years on the job.

Or, another one:

"it is recognized that the market can have major failures, that growth
alone is not enough or can even be destructive of the natural environment
or precious social goods and cultural values. Only the pursuit of high
quality growth is worth the effort -- growth that can be sustained over
time... growth that has the human person at its center.... growth based on
continuous effort for more equity, poverty alleviation, and empowerment of
poor people, and growth that promotes protection of the environment and
respect for national cultural values... a striking and promising
recognition of a convergence between a respect for fundamental ethical
values and the search for efficiency...."

"...that systematically dismantling the state is not the way to respond to
the problems of modern economies; rather, we must aim for a slimmer yet
more effective state, able to provide the private sector with a solid
framework in which the rule of law could prevail on a level playing
field."

Or, "the new emerging paradigm, rooted in fundamental human values, taken
together with a better ability to prevent and manage the crises, is a
distinct and positive chance of our times... a new perception of
globalization is emerging .. a call for common action to transform
globalization into an effective instrument for development. Globalization
can be seen in a positive light, not what some have portrayed it to be, a
blind, potentially malevolent force that needs to be tamed... a logical
extension of the same basic principles of economic and human relations
that have already brought prosperity to many countries...."

As incredulous delegates and observers listened, the Camdessus speech was
also splattered with a mixed bag of old and new IMF virtues --
liberalization of trade and capital movements, but with an orderly
approach, need for transparency, accountability, democratic governance,
fighting corruption, poverty alleviation as the center-piece of economic
policy ('we cannot ignore poverty'), need for gender equality, increasing
aid, debt relief, market access to developing countries, support to Kofi
Annan's recommendation for ceiling on national military expenditures -- a
re-invigorated multilateralism so that globalization is no longer operated
by autonomous technological and financial forces, but towards world unity
in the service of human kind, etc. etc.

The South African Trade Minister Alec Erwin referred to Fund-Bank
proposals for multilateral debt relief and IMF gold sales and need for
quick action on these.

There were also some polite comments and questions about the relationships
of the new paradigm with the Washington consensus, and from St. Lucia
about the problems of very vulnerable economies which may not strictly
come under the category for fast debt reliefs, and the President of the
Board Amb. Petit of France, asking Camdessus to amplify some of his
personal views now with those of the IMF.

Then came some comments and questions from Mr. Martin Khor of the Third
World Network that clearly upset Camdessus.

It was almost touching, Khor said, to see Camdessus at the end of his IMF
career to be born again as a 'human development advocate' talking about
health, education, poverty and environment. But it would have been more
convincing if he had first acknowledged the big role of the IMF in
generating the crisis of poverty and development in Africa, Latin America
and how the IMF's structural adjustment policies had caused cutbacks in
health and education budgets. In Asia the IMF, through its earlier advice
for financial liberalization, had led to the present crisis. It was the
IMF that introduced conditionalities of high interest rates, tight money,
budget cutbacks, and closure of local banks.

Yet, said Khor, Camdessus does not take lessons from IMF mistakes but
continues to dole out advice to the victimized countries, and with double
standards, since the advice for transparency etc could have equally
applied to international players in the markets, the hedge-funds etc. And
while Camdessus said the reform of the affected countries were not yet
over, he forgot to say that the reform of the international financial
system had not even started. He had not even called for transparency and
strict regulation of financial markets and big players there. NGOs of the
South were fighting corruption and cronyism in their countries. But what
about the corruption and cronyism in the North, and what Prof Bhagwati had
called the Wall Street-US Treasury-IMF complex.

If Camdessus had been serious he would have led a process of reform to
curb speculators and short-term flows of funds, and prevented the IMF
being used by financiers and the US treasury. If he had been serious, the
IMF should at least have changed the quota shares so that developing
countries could acquire more shares and quotas, at least to have 50%
voting rights. If Camdessus was serious about his new paradigm, he should
confess to his past sins, admit the IMF liability for the economic and
social losses of many countries and advocate all the required changes.

Khor was cheered loudly by the government delegations and observers inside
the plenary hall.

While replying, the picture of Camdessus on the large videoscreens in the
hall showed Camdessus was clearly upset - though part of the reason
perhaps lay in the fact that before he came into the hall in the morning
another NGO had splattered his face with a cream-pie.

Camdessus started off with sharing Erwin's sense of crisis and need for
speedy actions on debt relief, and then added: "I don't know what the
Washington consensus was. I never signed it."

He was, of course, right. The gospels setting out Christ's preaching were
those of the apostles, not Christ himself. And the stern injunctions by
the prophets of the Market God (the Fund and the World Bank) echoed by the
Washington think tanks were assembled and given the name 'Washington
consensus' by Prof Williams. And thus, it has become easy - first by the
Bank and now the Fund to deny authorship, though in its hey days neither
repudiated them or distanced themselves from the consensus.

"You are more interested in the mistakes of the past than in exploring
paths for the future," Camdessus told Mr. Khor, and refused to make any
mea culpas. The lowering of interest rates and government spending by
Thailand and others was because their adjustment had succeeded, not
because of Malaysia's reversal of course and capital and exchange controls
which were no panacea, Camdessus claimed. Liberalization had been
undertaken in countries in a disorderly way, and in Korea it was the IMF
that had advised some reversals.

Though Khor had raised the issue of double standards in terms of lack of
transparency and accountability of markets and big players there,
Camdessus repudiated any double-standards, citing the examples of the UK
and Canadian governments in making disclosures!