Transcript Document

Top Ten Reasons Why the IMF
Shouldn’t Take the Lead in Reform
of Global Finance
By Mark Weisbrot
Co-Director of the
Center for Economic and Policy Research (CEPR)
Thursday, October 9, 2008
10. The IMF totally missed
the two biggest asset
bubbles in the history of
the world.
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49
19
52
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55
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58
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61
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64
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82
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91
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94
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97
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00
20
03
20
06
Percent of 1954$ (1st Quarter)
Home Prices
200
180
160
140
120
100
80
60
Year
House Prices
Rent
Price-to-earnings ratio
9. The IMF is
unaccountable.
8. Developing
countries have no
significant say in
IMF decisions.
Voting Structure of the IMF
Pre-Singapore IMF Voting Rights
United States
17.0%
All Others
37.2%
Japan
6.1%
Germany
6.0%
France
4.9%
Korea & Singapore
1.2%
United Kingdom
4.9%
Mexico
1.2%
High-Income Oil
Producers*
4.5%
Brazil
1.4%
Australia & New
Zealand
1.9%
Italy
3.2%
India
1.9%
Russia
2.7%
China
2.9%
Canada
2.9%
* High-income oil producing countries include: Saudia Arabia, Kuwait, the United Arab Emirates, Qatar, Brunei, and Bahrain
Source: Bryant, Ralph C. (2008). "Reform of IMF Quota Shares and Voting Shares: A Missed Opportunity." Washington, DC:
Brookings Institution (April 8). http://www.brookings.edu/~/media/Files/rc/papers/2008/0409_imf_bryant/0409_imf_bryant.pdf
Voting Structure of the IMF
Current IMF Voting Rights
United States
16.5%
All Others
37.7%
Japan
5.9%
Germany
5.8%
France
4.8%
Brazil
1.4%
United Kingdom
4.8%
Mexico
1.4%
High-Income Oil
Producers*
4.3%
Korea & Singapore
1.7%
Australia & New
Zealand
1.8%
China
3.6%
India
1.9%
Canada
2.8%
Russia
2.6%
Italy
3.1%
* High-income oil producing countries include: Saudia Arabia, Kuwait, the United Arab Emirates, Qatar, Brunei, and Bahrain
Source: IMF, 2008. "IMF Members' Quotas and Voting Power, and IMF Board of Governors."
http://www.imf.org/external/np/sec/memdir/members.htm
7. The IMF is at the head
of a creditor’s cartel that
has pressured
developing countries to
adopt harmful policies
over the last three
decades.
6. The IMF made a
mess in the last set
of financial and
economic crises:
Argentina, East
Asia, Russia…
Per Capita GDP in Asian Crisis Countries,
(1997=100)
Per Capita GDP in Argentina, 1990-2008
11,000.00
10,000.00
9,000.00
8,000.00
7,000.00
6,000.00
5,000.00
4,000.00
3,000.00
2008
2007
2006
2005
2004
2003
2002
2001
2000
1999
1998
1997
1996
1995
1994
1993
1992
1991
1990
2,000.00
5. The IMF has
shown no serious
efforts at reform
despite repeated
failures.
4. The IMF’s economic
projections can be way
off target and may be
politically influenced.
IMF Projected GDP Growth for Argentina
and Actual Growth
3. The IMF’s
recommended
economic policies
have, in general,
failed.
Latin America's Unprecedented
Long-Term Growth Collapse
90.0
82.0
80.0
Total Growth (%)
70.0
60.0
50.0
40.0
30.0
20.0
14.0
9.0
10.0
0.0
1960-1980
1980-2000
2000-2007
Western Hemisphere: Total growth in per capita real GDP (Purchasing Power Parity)
Slowdown in Economic Growth
2. The IMF has been a
champion of the
de-regulated global
financial flows that
played a huge role in
the current mess.
1.The IMF is run
mostly by the
Treasury
Department.
U.S. Treasury
Secretary
Paulson.
Compensation
at Goldman
Sachs in 2006:
$164 million.