PVAF LIFE TRUTH SEARCH SERIES CONTINUES.....IMF...the three letter 'dirty word" AMONG POOR NATIONS whom IMP WAS CREATED TO SERVE in their growth to pr
Posted by Vishva News Reporter on November 29, 2010


PVAF in its continual search for knowledge and more knowledge to find the TRUTH of our existence from epistemological aspect of our existence...has now been hyperlinking all its publishing on this website to internet knowledge sources...Please click on the hyperlinked words to enlighten and educate yourself to whatever depth you wish...Please be aware that many internet knowledge sources are not only evolving in its comprehensiveness plus accuracy and may only convey knowledge as defined by the word "verisimilitude" meaning to a degree of truth/false...we urge knowledge seekers to keep on searching for Truth....
Bretton Woods conference
An amazing human phenomenon that is happening repeatedly with IMF...as part of money-based-greed serving selfish purposes of those who have money to lend to others....and thus going against the original altruism and compassion for the poverty affliction of the founding fathers of IMF...or were the founding fathers duped by the money people right at the start...
To read the amazing but true facts leading to the above statement please click on the next line.....including sthe 2009 story of the IMF being booted out of Albania after 17 years....









The International Monetary Fund (IMF) is the intergovernmental organization that oversees the global financial system by following the macroeconomic policies of its member countries, in particular those with an impact on exchange rate and the balance of payments. It is an organization formed with a stated objective of stabilizing international exchange rates and facilitating development through the enforcement of liberalising economic policies[1][2] on other countries as a condition for loans, restructuring or aid.[3] It also offers loans with varying levels of concessionality, mainly to poorer countries. Its headquarters are in Washington, D.C., United States. The IMF's relatively high influence in world affairs and development has drawn heavy criticism from some sources.[4][5]


Organization and purpose

IMF "Headquarters 1" in Washington, D.C.

The International Monetary Fund was conceived in July 1944 originally with 45 members and came into existence in December 1945 when 29 countries signed the agreement,[6] with a goal to stabilize exchange rates and assist the reconstruction of the world's international payment system. Countries contributed to a pool which could be borrowed from, on a temporary basis, by countries with payment imbalances (Condon, 2007). The IMF was important when it was first created because it helped the world stabilize the economic system. The IMF works to improve the economies of its member countries.[7] The IMF describes itself as "an organization of 187 countries (as of July 2010), working to foster global monetary cooperation, secure financial stability, facilitate international trade, promote high employment and sustainable economic growth, and reduce poverty".


....To continue reading this article on Wikipedia please click here and after finishing reading please come back to this web page to read the today's story about IMF and Ireland and other countries "touched" by IMP for more than 60 years ....


......followed by related news including
IMF experience of the young nation of Albania....
  What Ireland proves:
The need for a world without bailouts

(From Canadian Globe and Mail: Nov. 27, 2010: Doug Saunders in Dublin, Ireland;
a member of The Globe and Mail's European bureau)

Standing on Dublin's Merrion Street on Thursday, I could just as well have been in Buenos Aires in 2003, Ankara in 2000, Lagos in 1989 or Kingston in 1979. The people were more pallid and generally better fed, but the anger and the slogans were identical. So was the graffito someone had spray-painted on the side of the building, as they do all over the world: “IMF go home.”

Ireland to rise again, with or without euro When that three-letter abbreviation becomes known and understood by people who take the bus to work, your country is in trouble. The International Monetary Fund was designed, in the 1944 Bretton Woods conference, to be part of the subfloor plumbing of the world's economy, to keep money flowing between countries and prevent the sort of inflationary debt-default disasters that put Germany in Hitler's hands. But it came to take on a more infamous role as the archangel of international finance. An IMF bailout is a dark punctuation in any nation's history, a humiliation that is never forgotten.

Ireland's experience this week was much like what people saw in Nigeria in 1989 or Britain in 1976: First, the country discovers that international bond markets, frightened by its unstable economy, will no longer lend it money at a price it can afford. So the IMF team from Washington checks into the expensive hotel across from the finance ministry, pores over the books and then delivers a Structural Adjustment Program – drastic reform that turns the country's whole economy into a debt-repayment machine.

Government is gutted. Taxes rise; subsidies and grants vanish; social programs are pared back; state companies are sold; wages are slashed. Ideally, debt drops and investors regain confidence. But the poor and middle classes pay the price for mistakes made by governments and bankers. Cue rioting and electoral defeats.

Some IMF bailouts – economists call it conditional lending – do help to turn countries around. Brazil and Turkey (which this year ended 50 years of IMF stewardship) have built economies with real social benefits, though the process has often been calamitous.

Other times, the IMF is a handy scapegoat. After the Second World War, many former colonies in Asia, Africa and South America developed false economies loaded with regime-owned companies and isolated from the world through trade barriers, all sustained only through debt. In the 1980s, this house of cards fell apart and scores of countries went into economic crisis.

The resulting bailouts marked the beginning of an era of genuine growth for countries such as India. But the conditions were often devastating, preventing growth from being used to support social mobility. In left-wing circles, it's still common to blame the suffering caused by postwar economic authoritarianism on the IMF adjustments that followed. Countries like Venezuela and Zimbabwe have been driven to extremism and isolationism that feeds on anger at the IMF.

The fund itself admits that its actions in Southeast Asia and Latin America in the late 1990s were harsh enough to destroy prospects for growth. In Indonesia, a bailout led to a further crash. The ultimate disaster was Argentina, where the IMF endorsed heavy borrowing, deep government spending and a dangerous fixed-currency system in the 1990s, and then responded to the inevitable collapse with a brutal bailout that led to a paralyzing, full-scale debt default.

The current IMF managing director, French socialist Dominique Strauss-Kahn, took over in 2007 on a pledge to end all that. He has moved to set up a new system where a poverty-alleviation plan is part of the deal, the country is given a bigger stake in its own fate and longer-term concerns are taken into account.

At the Seoul G20 summit this month, reforms passed to turn the IMF into an organization mainly owned and controlled by developing countries, so it will no longer be the Western world's fisher of souls among the world's poor. In fact, the opposite may be true: As observers have pointed out, China is now wealthy enough to purchase the entire IMF outright, while the largest bailout recipients are in Europe.

But there, the IMF has been dragged into uncharted waters and is again engaging in the very practices it abandoned a decade ago. The Greek and Irish bailouts (and possible Portuguese and even Spanish ones) are, monetarily, mainly European Union bailouts: Two-thirds of the money comes from a special fund created by the German and French governments. But the IMF is delivering the blow. It reportedly argued in favour of a more gentle and progressive plan, but was overruled by the EU, which sought quick recovery of debts.


reland's government was not in trouble. It did not have the overspending and long-term-debt problems that Greece did. Ireland's fiscal balance was fine except for the need to take control of the failed private banks. So the IMF has taken on a new role, as a guarantor of private banking and private-sector stability, that is far removed from the visions of 1944.

Our best hope is that the Irish debacle shows, vividly, what is wrong with the whole ritual: Even a sensitive and caring bailout is not designed to help a country. It is designed to help lenders get their money back.

The IMF is the prime lender to troubled countries, and acts on behalf of other lenders. A country's longer-term interests may get token consideration, but the thrust is to make it repay bonds reliably and without inflation. This will always create more problems than it solves.

First, it is countercyclical. To take enormous sums of money out of an economy in the middle of a downturn is only going to exacerbate the cycle of failure. It happened in Southeast Asia; it will happen in Ireland.

Second, it creates moral hazard. Because a bailout is expected to spare bondholders pain in case of trouble, institutions lend recklessly to countries without sound fundamentals. Bailouts are now anticipated and demanded: Ireland watched this month as interest rates on its 10-year bonds soared to an unaffordable 9 per cent – not because there were any signs that its economy was insolvent, but because investors were not going to put their trust in a country with failing banks without promise of a bailout.

“The IMF doesn't put out fires,” Harvard economist Robert Barro famously argued. “It starts them.”

Third, while they are sometimes a useful excuse for tough measures by governments such as Turkey's and Brazil's, there's no indication that IMF plans actually improve anything in themselves, and plenty of evidence to the contrary. IMF economists Ashoka Mody and Diego Saravia found that bailouts work only for countries that were likely to have saved themselves anyway. Meanwhile, countries that undergo multiple interventions fare worse in the lending market because the IMF's presence is seen as a sign something must be wrong – even if it isn't.

After four decades and hundreds of bailouts, there is no clear pattern of improvement: That would be a poor track record for any investment outfit, never mind one capitalized with almost a trillion dollars.

Finally, bailouts do long-term damage to the world's economy and social structure. Economist Sherle Schwenninger of the New America Foundation has found that, even though many of the financial reforms of the late 1980s and early 1990s were necessary, the violent way the IMF delivered them hollowed out the middle class of the developing world.

“Most of those countries,” he said, “forwent 2 to 3 per cent of GDP just on austerity in those years. You could have had less loss of the old middle class and a much broader expansion of the new middle class if you'd taken a more gradual approach.”

That is the danger in Europe now: Economies may be rendered stable again, but the process could cut off paths out of poverty for a generation or more.

There is some understanding today that this is simply not the right way to do things. German Chancellor Angela Merkel is pushing to pass reforms so that bondholders will have to participate in the rescue of countries from financial crises. This has been the IMF's direction as well.

On the other hand, Argentina restructured its debt this month without any help from the IMF. Burned from a decade of insolvency, it went directly to its lenders and renegotiated the debt. This wasn't easy: Much of what it has done is what the IMF would have imposed, but at its own pace, with its best interests in mind. It's what smart countries might do if there were no IMF.

Here, we can begin to see the shape of a world without bailouts. It's a world where there's nobody to blame but yourself, where the goal might be something other than simply paying everyone back as quickly as possible – and where the arrival of men in suits from Washington doesn't cut a black hole in a country's history.

More related to this story


....and now a 2009 supporting evidence story from...
.....Albania Bids Adieu to IMF Amid Bickering...

Albania Economy: Tirana, Jan. 08, 2009

 The International Monetary Fund, IMF, ended its mission to Albania on Thursday after monitoring its economy for 17 years, its departure criticised as premature by economic experts and the opposition.

Prime Minister Sali Berisha described the end of the IMF mission as the end of post-communist transition for the Albania’s economy.
“This is the end of the transition of what used to be one of the most centralized economies in Europe and in the world,” said Berisha. “For a democratic country, there is nothing more important than a solid market economy, and now Albania can move forward on its own feet.”

Minister of Finance Ridvan Bode said “Albanian institutions have achieved the necessary maturity to manage the country’s finances”.

However, the decision not to renew the IMF’s tenure in Tirana was cricitised by the opposition, who been quick to accuse the Prime Minister and the Minister of Finance of arrogance and irresponsibility.

Experts fear the government’s populist policies could undermine tight fiscal discipline. In its yearly report on Albania for this year, the IMF remarked on that danger, noting that “popular politics is the main risk to Albanian macroeconomic stability”.

According to Selim Belortaja, head of the Albanian Center for International Trade, politicians don’t yet show responsibility when it comes to public spending, while financial institutions are not yet prepared to act independently.

“Albania has only enjoyed financial stability because behind any government decision there was an IMF official,” Belortaja told Balkan Insight in an interview late last year.

Officials have already started to bicker about growth numbers. Earlier this week, Albania’s Finance Minister rejected an economic growth projection given by the state statistics institute, but found himself rebuked by the Prime Minister.

The statistics institute INSTAT projected that Albania registered a record high Gross Domestic Product growth of 9.9 percent in the last four quarters ending September 30. Finance Minister Ridvan Bode said that the INSTAT projection was only for a quarter, while growth for the year was between 6.0 and 7.0 percent of GDP.

Bode was later rebuked by Premier Sali Berisha, who said the Finance Ministry was not talking about the real numbers. But the IMF head of mission in Tirana, Ann Margaret Westin, rejected Berisha’s claim of double-digit growth.

“We believe that growth is within our projection of 6 per cent of GDP,” said Westin.

However, even Westin was chastised by Berisha, who said he believed economic growth in the country was being under-evaluated and lashed out at the media for being economically illiterate.

“The problem is that your knowledge of the economy is zero,” Berisha told reporters, adding that they were trying to impose a debate that was not real.

Source: Balkaninsight

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