Responses: Jo Marie Griesgraber, New Rules for Global Finance Coalitions (IMF)

The IMF has been highly ineffective in dealing with any of these crises.  They did not anticipate any of them.  The fundamental question is about the conditions:  the rest of the world is encouraged to engage in deficit financing to stimulate demand; the LICs still have to address short term balances of their budgets and trade payments. 
The Fund insists that some 80% of the their programs are more flexible;  but the data are not forthcoming.  Also, “more flexible” means what?  They are very adept in their PR, in sounding like they are at the cutting edge, leading the world, helping the poorest;  but where are the data? 
In addition to stimulating their economies by providing added basic services, LICs need short term funding for trade; and still more they need medium and long term funding for investment in infrastructure and productive capacity, to meet domestic needs as well as to increase exports.
To the extent the IMF provides more money, up-front, with fewer conditions the better—it’s the conditions part that never seems to change.  True structural conditions no longer act as a trigger to stop the flow of money, but the countries still have to go through the privatizations (as Jamaica is preparing to do, and the salary caps for civil servants, and devaluations which wreaks havoc with their foreign debt.  I have had a former Finance Minister of Jamaica currently in DC invite me to lunch to plead with me to work to change the IMF conditions!!!  Why is this the job of civil society?  Is this not the responsibility of the major shareholders, to listen?  To insist in changes? 
Closely related to the IMF’s intransigence (despite good PR to the contrary), on conditionality is the persistent demand of donors that LICs have an IMF program to qualify for ODA.  These ties are irresponsible and irrational but they persist.  When do the donors see what this institution is doing?
These conditions persist because the core function of the IMF continues to be helping LICs (any borrower) meet short term BOP problems; if the Fund is to be an institution engaged in development funding (10-year loans means they are indeed engaged in development), then they must change their perspectives, including hiring staff who understand development financing.  Short term BOPs are NOT the  priority of meeting the demands of development. 
Just imagine the bifurcation of this institution when it gets more deeply into the business of working with the GSB to regulate global finance!  Why should civil society in G20 countries support a larger role for the IMF in the effective regulation of their economies when CSOs see the harm the Fund does in LICs.  I’ve spoken with so many government officials and academics and CSOs in Latin America, Africa, Central Asia, and South and Southeast Asia—they are so similar in their complaints about the IMF.  Why should anyone think the IMF can do a great job on the global level when they fail repeatedly on the small level?!  
But it is precisely the G20 countries with the power, the clout the reform the IMF.  Diddling with the terms of facilities providing funds for LICs is not the central issue—it’s the terms of lending!  The conditions—and those are not discussed in the cheery press releases accompanying the new arrangements for the LICs.  And, most of the $17 billion are to come from bilateral donors!  The IMF has too much money, not too little—unless and until it reforms its governance, its accountability to the people its policies impact, and the skill mix of its staff, it should have no more money.
The G20 must muster and focus its political resolve to reform this institution:  we the citizens of the G20 governments are responsible for the IMF; but in fact, no one is held accountable, no one suffers from bad policies except the poor people, especially in LICs.
May this exercise not be pro forma, not another exercise in futility.