Posted
6th June 2001
IMF - The View From Outside
The International Monetary Fund has been hijacked by those who
need it least. The fallout from this is only slowly becoming
apparent, and that slow revelation is eminating almost solely
from those countries with little access to the global media,
the so-called developing countries, which New Zealand would
do well to indentify with. The International Monetary Fund (IMF)
has lost sight of its original purpose to facilitate financial
recovery, becoming a tool in the political arena, Malaysian
Prime Minister Mahathir Mohamad said in a speech to the inaugural
session of the Eleventh G15 Summit last week.
Speaking
on behalf of Asian nations at the Summit, Mahathir said: "It
has become all too clear that the IMF is more a political instrument
than one for financial rehabilitation. "The sufferings of people
seem to be of little concern as long as certain policies and
directives are implemented." Mahathir said little progress has
been made on reforming the "international financial architecture",
with the focus more on ideological issues rather than practical
ones. "The highly questionable value of free and unregulated
markets is still being touted as the ideal which must be adhered
to at whatever cost.
The
ideology of market freedom it seems is more important than the
well-being of human society," he said. Malaysia will host a
meeting of G15 experts in the next few months that will push
ahead with a commitment to take a more proactive role in the
financial rehabilitation process, he said. Mahathir said the
pressure placed on developing countries to embrace the ideology
of a free market ignores the fact that their economies may not
be ready to support such a system. "There is no doubt that globalisation
has exacerbated the vulnerabilities of developing countries
and eroded their national policy-making capacity," he said.
Developing
countries have been unable to achieve equitable terms of trade
compared to developed countries, and the pressure to accept
the latest round of World Trade Organisation negotiations threatens
to erode what little policy discretion they have left, he said.
"We have to manage the challenges and be wary of the risks (of
globalisation) if we do not wish to be marginalised," he said.
He called on developed countries to lower the price of providing
information and communication technology (ICT) to their poorer
neighbours, and to provide financial and infrastructure development
support. Mahathir said the major impediment to G15 countries'
ability to bridge the digital divide is poor access to the internet,
with less than 20 pct of developing economies' populations having
access to a fixed telephone line and internet, compared to 50
pct in developed countries. He said governments should help
the private sector finance infrastructure development, particularly
in the less profitable remote areas.
Leaving
the financing solely to the private sector risks worsening the
information poverty cycle, as companies will inevitably focus
on providing premium services in commercially viable areas.
Developing the necessary "human capital" and implementing the
legal and regulatory frameworks necessary to create new markets
in online transactions are also crucial to making poorer economies
more competitive on a global scale, he said. However, he warned:
"The rapid advancement in ICT has its downside too... Technological
developments in certain areas have also made it difficult for
national governments... to control the spread of negative information
and cultural products."
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