As the UK government proposes heavy spending cuts,unions and others are responding with critiques on the impact of these policies and advancing alternatives. The largest public sector union, Unison, and the TUC have published an analysis of the government's budget proposals. This goes beyond the impact of tax and benefit changes, and shows how the cuts in services affect the poorest households most.
The Impact of the Global Financial and Economic Turmoil on the Philippines: National Responses and Recommendations to Address the Crisis
Joseph Anthony Lim, Third World Network (2010)
Financial Liberalization and the Impact of the Financial Crisis on Singapore
by Michael Lim Mah-Hui & Jaya Maru, Third World Network (Sep 2009)
The Impact of the Global Financial Crisis: The Case of Malaysia
by Goh Soo Khoon & Lim Mah Hui, Third World Network (Dec 2009)
The Costs of 'Coupling': The Global Crisis and the Indian Economy
by C. P. Chandrasekhar, Third World Network (Dec 2009)
Pakistan: Causes And Management of the 2008 Economic Crisis by Irfan ul Haque, Third World Network (MARCH 2010)
The IMF had suffered a sharp decline in its lending business in recent years until the present global financial crisis led to a resurgence in lending. The Group of 20 (G20) has empowered the IMF by making it the key lending institution for crisis-affected countries in need of balance of payments support. As a result, the IMF’s lending portfolio has seen a sudden boost, and the cumulative amount of its loans now stands at $47.9 billion.
SINGAPORE -- The economic recovery that rocketed through Asia starting last year has been felt in the usual ways -- a thickening parade of cargo ships around this trade-driven city-state, rising real estate and stock prices -- but it was demand for personal computers in Indonesia that caught the attention of executives at computer memory maker Showa Denko.
The sad fate of Mongolia these days makes me think of the late Mexican President Porfirio Díaz’s famously cited lamentation:
“Poor Mexico, so far from God and so close to the United States!”
While the political agenda at the IMF is shifting back to mandate and governance reform, there are growing calls that the Fund needs to fundamentally rethink the monetary and fiscal policies it demands of borrowers if the institution is to retain legitimacy and renew its mandate.
The IMF has stated that it has changed its traditional stances on tight fiscal and monetary policy advice and lending conditions and has become “more flexible”. However, experience so far indicates that the IMF is still imposing inappropriate, pro-cyclical1 conditions on many borrowers. These may unnecessarily exacerbate economic downturns in a number of countries.
[The latest issue of Bretton Woods Update (UK) includes an article on the public sector austerity conditions in some recent IMF emergency loans and their impact, focussing on the examples of Romania and Iceland in particular. Although the IMF has urged industrialized countries to adopt deficit-financed fiscal stimulus policies to counteract the impact of the global recession, the article states that only three developing countries -- India, Mozambique and Tanzania -- have been advised by the IMF to adopt counter-cyclical stimulus polices.]
Despite promising IMF rhetoric about greater flexibility in fiscal and monetary policies because of the current crisis, IMF loans in Romania, Latvia and Armenia show that practice is not in line. The Fund is still pushing tight fiscal policy and single-digit inflation.
While the IMF undertakes high-speed reviews into its lending instruments and conditionality, it continues to make crisis loans with heavy conditionality that may adversely impact the poor in developing countries.
A few months ago pundits were calling time on the Fund, but the financial crisis´ impact on emerging markets has brought it roaring back to life, with its usual dose of austerity and conditionality.
The countries in trouble have tried hard to avoid the IMF, more publicly than usual. It is not clear whether this was to avoid the stigma attached to going to the Fund, the austerity measures required, or both. However, policies pursued by rich countries, such as tax cuts and looser monetary policy, will not be allowed under IMF programmes elsewhere.