Source:
Social Watch
Roberto Bissio, ITeM
Wed Oct 14 2009
Istanbul meetings legitimized the debate on the "Tobin tax" on international financial transactions or the idea of imposing a "global tax" on banks to bail out poor countries in case of a crisis, just as savings are ensured at the national level. According to DSK, "this is the starting point for a new IMF and you can proudly tell your grandchildren that you were in Istanbul when it all started."
While the World Bank is "suffering" due to budget cuts in donor countries and the unfulfilled promises of increased aid to poor countries, the IMF has emerged strengthened from the G-20 Summit in Pittsburgh as the institution responsible of injecting liquidity into the global economy to accelerate economic recovery.
Surrounded by NGO groups traditionally critical of the macroeconomic conditionalities imposed by the Bretton Woods institutions, IMF economists tried to convince the world that "we have learned from past mistakes", that "conditions have changed" and that its access to loan requirements are increasingly flexible. Even Joseph Stiglitz, Nobel Laureate in Economics and staunch critic of the IMF, told the Wall Street Journal that the financial institution is "not repeating the mistakes it made in the crisis in Southeast Asia" and DSK "is acting more openly”.
Indeed, Strauss-Kahn has defended the idea of reforming the institution to give more votes to emerging countries and enhance the IMF capacity of assisting struggling economies. Even to turn the fund into a “lender of last resort” as a first step towards becoming a sort of Global Central Bank that would issue its own currency and have special drawing rights (SDRs).
Istanbul meetings legitimized the debate on the "Tobin tax" on international financial transactions or the idea of imposing a "global tax" on banks to bail out poor countries in case of a crisis, just as savings are ensured at the national level. According to DSK, "this is the starting point for a new IMF and you can proudly tell your grandchildren that you were in Istanbul when it all started."
However, none of those ambitious and popular ideas –at least for most clients of the IMF- was really adopted in Istanbul. In the best of cases, they were postponed until “better studied”, that is to say, until there is enough political will among the countries of the G7 that hold the majority and, especially, that of the US.
This perhaps explains the relative pessimism of a predecessor in office to DSK, former German IMF managing director Horst Koehler, who now holds the ceremonial post of president of his country.
Speaking to unions in Berlin, coinciding with the meeting in Istanbul, Koehler said the international financial markets have become "a monster". He added that "the market alone does not do everything well" and that "an energetic State and intergovernmental regulation is needed”. The German President advised unions to "participate" in the economic policy together with the new center-right government, because "I do not see that the monster is on its way of being tamed".
This article was first published in Spanish language by Agenda Global, a weekly supplement published by La Diaria, in Montevideo, Uruguay.
Related information:
* IMF/WB Annual Meetings, Choike's coverage
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