[stop-imf] IMF slammed at IDB meeting

[Robert Weissman]

From: "Soren Ambrose" <soren@50years.org>

Two articles from the annual meeting of the Inter-American Development
Bank earlier this week in Fortaleza, Brazil.  Statements from the
President of Brazil, no enemy of the IMF, and the Finance Minister of
Argentina, who believes he desperately needs the IMF, reflect a new mood
in Latin America: with evidence of its consequences too obvious to
avoid, the neo-liberal "free trade" agenda is becoming indefensible.
Lenicov also hits on another of the basic contradictions of structural
adjustment: the IMF wants good governance, democracy, and popular
acquiescence, but insists on policies which, because of their
austerity-and-more-austerity prescriptions, lead to popular opposition
to the government that implements them.

Soren Ambrose - 50 Years Is Enough Network - Washington DC


Brazil Leader Lashed Out at IMF
Monday, 11-Mar-2002 4:30PM      Story from AP 

FORTALEZA, Brazil (AP) -- Using unusually blunt language, Brazilian
President Fernando Henrique Cardoso on Monday lashed out at the
International Monetary Fund, saying its accounting rules should be
changed to help developing nations to fend off financial crises more
easily.

Speaking at the 43rd annual meeting of the Inter-American Development
Bank in this northern coastal city, Cardoso fired a broadside at the
Fund and its attitude toward developing nations.

"Why freeze our possibilities to finance our development by using mere
accounting maneuvers?" asked Cardoso, adding that the Fund's accounting
rules for developing nations were not the same as those used in Europe,
for example.

He also said the Fund's Special Drawing Rights should be increased to
allow the IMF to react faster and more effectively in helping poorer
nations fend off financial crises.

Special Drawing Rights are the IMF's artificial currency units used to
supplement members' reserve assets and determine their loan
availability.

"We have already asked the IMF several times to clarify this issue,"
said the usually diplomatic Cardoso.

"The answers they've given us so far were as if we were illiterates," he
said. "We're not. The Peruvian President is an economist. He can read. I
am a sociologist."

Cardoso's remarks, coming on the heels of an appeal from Peruvian
President Alejandro Toledo that the pursuit of free-market reforms
should not eclipse Latin America's need to combat widespread poverty,
won Cardoso a hearty ovation.

There was no immediate comment from IMF officials at the meeting.

The broadside came as Latin American nations are increasingly
questioning the effectiveness of free-market reforms as a bulwark
against financial crises.


Argentina Official Decries IMF Demands
Monday, 11-Mar-2002 4:20PM      Story from AP / TONY SMITH, AP Business
Writer 

FORTALEZA, Brazil (AP) -- Conditions set by the International Monetary
Fund for resuming credit to bankrupt Argentina are pushing the South
American country into a Catch-22 situation, Finance Minister Jorge Remes
Lenicov said Monday.

Lenicov told a news conference at the 43rd annual meeting of the
Inter-American Development Bank that some demands being made by IMF
negotiators to reopen credit lines cut off last December were impossible
to meet because of Argentina's delicate political situation.

Violent street protests toppled two Argentine governments in a matter of
days late last year and Lenicov's boss, President Eduardo Duhalde, was
chosen by Congress and thus lacks a popular mandate.

As he moves to rebuild the shattered economy, Lenicov must avoid
unpopular austerity measures that could spark new protests, while also
winning IMF approval by steering a market-friendly course.

"Implicitly, they (IMF officials) tell us that a sustainable economic
program requires political support," Lenicov said.

"But where's the political support? Political support requires an
economy that is moving forward," he said. "But the economy is not moving
forward."

The government must be aware of "the acceptability of the measures" it
takes, Lenicov said.

Lobbying here for urgent international aid, Lenicov said Argentina needs
cash to make $9 billion in payments to multilateral agencies this year.
It must also back its peso, recently floated after a decade of being
pegged to the U.S. dollar, and rebuild its shattered banking system.

The government is also supporting a spiraling number of poor and
unemployed.

"We have implemented a good deal of the reforms of interest to the IMF,"
Lenicov said. "But there are some things we haven't yet done and others
that are going round in circles."

He did not specify exactly which reforms the IMF was proposing.

Lenicov, making his debut at an international event, won support from
Latin American colleagues.

"After making some efforts, Argentina ... is now saying 'I have done
something, now help me to take the next step'," said Brazilian President
Fernando Henrique Cardoso. "We must show solidarity ... and support
Argentina."

Even U.S. Treasury Undersecretary John Taylor, an opponent of bailing
out Argentina, said the country had made "some good changes at the
central bank," apparently referring to the recent appointment of former
IMF official Mario Blejer as Central Bank president.