IMF begins to regain its faded shine again
Tuesday, 31 March 2009
From Fazle Rashid
NEW YORK, Mar 30: International Monetary Fund ( IMF ) discarded not very long ago as having lost its relevance with its creditors shying away for its stringent lending conditions and fast growth of the private capital market is beginning again to regain its faded shine.
Now, with world leaders gathering this week in London to plot a response to the gravest global economic downturn since World War 11, the Fund is becoming a chip in a contest to reshape the post crisis landscape, New York Times (NYT) in a report said today.
Obama administration has set a big role for the IMF to pull the collapsing global economy and put it back on the right trail. Many emerging nations like China believe that the crisis that erupted in America has curtailed its ability to dictate the future course of action.
The US Treasury Secretary Tim Geithner who once worked with the IMF has urged world leaders to tripple Fund's financial resources to $500 billion to beef up its lending capacity to countries in deep distress and making it the new " lender of last resort ' for much of the world. The fund has so far lent $50 billions to 13 countries mostly in East Europe and Pakistan. Japan and European Union (EU) have pledged $100 billion each. The United States has promised to chip-in with similar amount but warned that its contribution would be late in coming because it would require Congressional approval.
China which has the largest foreign exchange reserve of more than $2.0 trillion is reluctant to provide any fund without an effective overhauling of the IMF structure. China is saying the emerging nations must have a greater say in the policy making level. The IMF is mainly made up of European nations and its Managing Director comes from Europe.
The presidency of the World Bank is reserved for the US. The demand is that both the posts should be open to competition with aspirants joining in from all over the world.
One reason why the IMF has emerged as such a popular cause is that the United States has failed to rally round other countries behind its call for further economic stimulus. The EU is deadly against any further financial stimulus packages. It wants creation of a supranational authority to scrutinize global banks and other financial companies
China is waging a relentless campaign to phase out US dollar as world's default reserve currency. It wants the dollar to be replaced by the IMF's Special Drawing Right (SDR), the synthetic currency created by the Fund that is used for transactions among its 185-member countries. China's demand may not win universal approval but one thing is sure that mighty dollar's value is eroding and waning.
Secretary of State Hillary Clinton and Treasury Secretary Tim Geithner will accompany President Obama to Europe for G20 as well as Nato meeting. Hillary and Geithner will talk with senior Chinese officials, ahead of the first summit level meeting between the US and China since Obama won the US presidency.
President Obama believes G20 summit will set framework for recovery but many other dismiss it as a " talking shop " that will do little to halt the global contraction. South Korea will urge G20 nations to ' roll back "all protectionists measures adopted since November last and plead to World Trade Organisation (WTO) to "name and shame" countries that erect barriers to trade and finance.
Meanwhile, Dubai will set new conditions for its public enterprises in need of financial assistance as it seeks to inject $10 billion to help emirate's sagging economy regaining its health.
Nato which once became redundant after the collapse of the Soviet union sprang to life with the growing might of the Islamic insurgents along Pak-Afghan border will request for a $2.0 billion annual help from its member countries to bolster its forces in Afghanistan.
NEW YORK, Mar 30: International Monetary Fund ( IMF ) discarded not very long ago as having lost its relevance with its creditors shying away for its stringent lending conditions and fast growth of the private capital market is beginning again to regain its faded shine.
Now, with world leaders gathering this week in London to plot a response to the gravest global economic downturn since World War 11, the Fund is becoming a chip in a contest to reshape the post crisis landscape, New York Times (NYT) in a report said today.
Obama administration has set a big role for the IMF to pull the collapsing global economy and put it back on the right trail. Many emerging nations like China believe that the crisis that erupted in America has curtailed its ability to dictate the future course of action.
The US Treasury Secretary Tim Geithner who once worked with the IMF has urged world leaders to tripple Fund's financial resources to $500 billion to beef up its lending capacity to countries in deep distress and making it the new " lender of last resort ' for much of the world. The fund has so far lent $50 billions to 13 countries mostly in East Europe and Pakistan. Japan and European Union (EU) have pledged $100 billion each. The United States has promised to chip-in with similar amount but warned that its contribution would be late in coming because it would require Congressional approval.
China which has the largest foreign exchange reserve of more than $2.0 trillion is reluctant to provide any fund without an effective overhauling of the IMF structure. China is saying the emerging nations must have a greater say in the policy making level. The IMF is mainly made up of European nations and its Managing Director comes from Europe.
The presidency of the World Bank is reserved for the US. The demand is that both the posts should be open to competition with aspirants joining in from all over the world.
One reason why the IMF has emerged as such a popular cause is that the United States has failed to rally round other countries behind its call for further economic stimulus. The EU is deadly against any further financial stimulus packages. It wants creation of a supranational authority to scrutinize global banks and other financial companies
China is waging a relentless campaign to phase out US dollar as world's default reserve currency. It wants the dollar to be replaced by the IMF's Special Drawing Right (SDR), the synthetic currency created by the Fund that is used for transactions among its 185-member countries. China's demand may not win universal approval but one thing is sure that mighty dollar's value is eroding and waning.
Secretary of State Hillary Clinton and Treasury Secretary Tim Geithner will accompany President Obama to Europe for G20 as well as Nato meeting. Hillary and Geithner will talk with senior Chinese officials, ahead of the first summit level meeting between the US and China since Obama won the US presidency.
President Obama believes G20 summit will set framework for recovery but many other dismiss it as a " talking shop " that will do little to halt the global contraction. South Korea will urge G20 nations to ' roll back "all protectionists measures adopted since November last and plead to World Trade Organisation (WTO) to "name and shame" countries that erect barriers to trade and finance.
Meanwhile, Dubai will set new conditions for its public enterprises in need of financial assistance as it seeks to inject $10 billion to help emirate's sagging economy regaining its health.
Nato which once became redundant after the collapse of the Soviet union sprang to life with the growing might of the Islamic insurgents along Pak-Afghan border will request for a $2.0 billion annual help from its member countries to bolster its forces in Afghanistan.