IMF's cash base under severe strains
Thursday, 16 April 2009
From Fazle Rashid
NEW YORK, Apr 15: International Monetary Fund (IMF), not long ago doomed as " fading towards irrelevance" has bounced back to reckoning with Group of Twenty (G20) nations opting to call it as " lender of last resort ". The new IMF role is seen by many analysts as " more an aspiration than a done deal".
The IMF must find a way to be both insurer and policeman with emerging nations playing a more assertive role in its policy planning. The concept that the IMF can act as the global central bank has been discarded, the analysts said.
IMF's cash base is under severe strains. The G20 nations to prop up the Fund promised a new funding of $1100 billion. There is a huge gap between the cup and the lip. Not a penny of the promised fund has been disbursed. Most of G20 nations will have to obtain approval from their legislatures to release the fund. That will not be an easy task.
Institute of International Finance (IIF), a body made up of more than 300 multinational banks, hedge funds and other financial institutes said last Tuesday that the IMF needs " nothing short of transformation" to stimulate emerging markets and monitor the financial system. IIF said " pledges to increase the IMF's funding" should be translated into reality.
IIF has written to Yousuf Boutros-Ghali, chairman of IMF's international monetary and finance committee to lay out suggestions for the overhauling of the Fund. IIF is of the view that Boutros-Ghali committee should not be afraid of tackling imbalances such as large US current account deficit and larger Chinese current account surplus.
But more depressing for South Asia whose immigrant workers crowd the US labour market is the news that two of America's top most workers unions, not only in terms of number but influence as well, have conceded to demand to legalise the illegal workers already in the country but bar any future recruitments from abroad. The legalisation of the illegal workers will benefit the immigrant workers from South America like Mexico and Puerto Rico.
Meanwhile, the UN security council adopted unanimously to strengthen measures against Pyongyang which includes targetting of banks dealing with North Korea. Security Council has reactivated a sanction committee which has been asked to come up with a list of individuals and institutes that will be blacklisted.
In another development, Pakistan has urged US not to impose strings on its expanded aid commitment to the country. Pakistan is struggling hard to keep at bay the mounting insurgency of the Islamic jihadists and put back on track an economy being kept afloat with the help of $7.6 billion from the IMF. The release of the US fund will be contingent upon how Islamabad tackles the insurgency.
In South East Asia Singapore fearing repetition of mass violence like one seen in Thailand that disrupted an international meeting is planning to slap a ban on public gatherings, ahead of the Asia-Pacific Economic Cooperation summit billed for November. The opposition fear that government measure could be a ploy to stiffle political dissent.
NEW YORK, Apr 15: International Monetary Fund (IMF), not long ago doomed as " fading towards irrelevance" has bounced back to reckoning with Group of Twenty (G20) nations opting to call it as " lender of last resort ". The new IMF role is seen by many analysts as " more an aspiration than a done deal".
The IMF must find a way to be both insurer and policeman with emerging nations playing a more assertive role in its policy planning. The concept that the IMF can act as the global central bank has been discarded, the analysts said.
IMF's cash base is under severe strains. The G20 nations to prop up the Fund promised a new funding of $1100 billion. There is a huge gap between the cup and the lip. Not a penny of the promised fund has been disbursed. Most of G20 nations will have to obtain approval from their legislatures to release the fund. That will not be an easy task.
Institute of International Finance (IIF), a body made up of more than 300 multinational banks, hedge funds and other financial institutes said last Tuesday that the IMF needs " nothing short of transformation" to stimulate emerging markets and monitor the financial system. IIF said " pledges to increase the IMF's funding" should be translated into reality.
IIF has written to Yousuf Boutros-Ghali, chairman of IMF's international monetary and finance committee to lay out suggestions for the overhauling of the Fund. IIF is of the view that Boutros-Ghali committee should not be afraid of tackling imbalances such as large US current account deficit and larger Chinese current account surplus.
But more depressing for South Asia whose immigrant workers crowd the US labour market is the news that two of America's top most workers unions, not only in terms of number but influence as well, have conceded to demand to legalise the illegal workers already in the country but bar any future recruitments from abroad. The legalisation of the illegal workers will benefit the immigrant workers from South America like Mexico and Puerto Rico.
Meanwhile, the UN security council adopted unanimously to strengthen measures against Pyongyang which includes targetting of banks dealing with North Korea. Security Council has reactivated a sanction committee which has been asked to come up with a list of individuals and institutes that will be blacklisted.
In another development, Pakistan has urged US not to impose strings on its expanded aid commitment to the country. Pakistan is struggling hard to keep at bay the mounting insurgency of the Islamic jihadists and put back on track an economy being kept afloat with the help of $7.6 billion from the IMF. The release of the US fund will be contingent upon how Islamabad tackles the insurgency.
In South East Asia Singapore fearing repetition of mass violence like one seen in Thailand that disrupted an international meeting is planning to slap a ban on public gatherings, ahead of the Asia-Pacific Economic Cooperation summit billed for November. The opposition fear that government measure could be a ploy to stiffle political dissent.