International Business, Politics and The IMF
May 22, 2011 3 Comments
Photo: “Le Grande Fromage”
The above embedded photograph by Douglas Castle, at http://ImagesByDouglasCastle.blogspot.com. Hmm…
International Business, Politics and The IMF
The International Monetary Fund, like the WTO (World Trade Organization) has always had a seemingly benevolent international and somewhat humanitarian (usely that latter term loosely) purpose and a great deal of power with which to make things happen. Ther always has been, however an undefined air of menace about both of these bodies.
Many suspect that the policies that both bodies make and the financing which the IMF, in particular provides, are really made for the benefit of an elitist “club of powerful nations” in order to keep the smaller, emerging nations in line, in debt, and in play.
The IMF, less transparent as a bully pulpit than the WTO, has an inherent propensity to provide international financial aid to certain countries in exchange for certain political considerations, including regime changes, political re-orientation, trade policies, and the like.
In short, a financial commitment from the IMF is not unlike an investment in a start-up company by a venture capitalist, or a loan (during lean times) from your in-laws — it comes with many strings attached, the least of which is the interest on the principal being extended to you. I like the term (popularized by credit card companies and the US automobile industry) “hidden charges.”
Unlike the venture capitalist however, the IMF takes “equity” in its debtor nations in the form of exerting a powerful influence on their domestic and international affairs. They have a penchant for control.
Because of the IMF’s latest “indiscretion” (Mon Dieu!), there will be increased scrutiny into its motives, the parties whom it truly benefits, and the role that it plays in manipulating puppet countries in international politics. They will be perceived more negatively than ever before, and will likely lose a bit of their influence because of the latest scandal and the ensuing scrutiny.
The news item which follows appears courtesy of a newsletter from Truthout.Org, admittedly a source of news and editorial commentary with a political and ideological bias (express or subtle), but which is informative and fascinating just the same:
The IMF after DSK
Mark Weisbrot, Guardian UK: “Now that Dominique Strauss-Kahn has resigned from his position as managing director of the International Monetary Fund (IMF), it is worth taking an objective look at his legacy there. Until his arrest last week on charges of attempted rape and sexual assault, he was widely praised as having changed the IMF, increased its influence and moved it away from the policies that – according to the fund’s critics – had caused so many problems for developing countries in the past. How much of this is true?”
Read the Article
Interestingly, businesspeople and consumers the world over are becoming increasingly skeptical of these providers of financial aid for international development. I believe that this is healthy.
The more that people realize that government or international agency money comes with a hidden agenda and an enormous but unstated price tag, the more the private sector will turn to its own constituency to solve problems internally, and the wider the door will be opened for internationa l commerce between smaller enterprises utilizing their own skills, resources and creative energies. As I have said many times before, the private sector and the consumers need to look less to large institutions, governments and international “help” agencies, and more to each other for support.
Yes, I believe that this return to private sector ingenuity and resourcefulness, as well as an increase in the power and intensity of international diplomacy through citizen ambassadorship and global commerce will be very healthy, indeed. Sovereign or international bailouts, subsidies and development loans always seem to wind up weaking the will of their recipients, and increasing reliance upon unreliable resources.
Going further (get the children out of the room before you read this), IMF might be an acronym for any number of other possible expressions, few of which can be verbalized in mixed company, and few which carry the cachet and majesty of the International Monetary Fund. Just use your imagination.
- IMF: What is the IMF? CNBC Explains – CNBC (rajcairnsreport.wordpress.com)
- Lagarde leads race for IMF job – Financial Times (news.google.com)
- France’s Lagarde favored to head IMF (kansas.com)
- Europe’s right to name IMF chief is challenged (guardian.co.uk)
- Australia Joins Calls for IMF to Appoint New Leader on ‘Merit’ (businessweek.com)
- VIDEO: Britain backs Lagarde for IMF job (bbc.co.uk)
- Mexico to Present Carstens as Candidate for Top Post at IMF (businessweek.com)
- IMF board releases plan for picking agency head (seattletimes.nwsource.com)
- Swan wants IMF boss picked on merit (news.theage.com.au)
- Belgian finance minister eyes IMF job (expatica.com)