To CGD’s “Choosing the Next Managing Director of the IMF” online survey, I would like to add a list of five key questions which would be a litmus test for my vote (if I had a chance to vote):
1. Should the IMF be turned into a true lender of last resort? If yes, how can that be accomplished? If no, why not?
2. Should Central Banks care about unemployment as much as they care about inflation? If yes, why? If no, why not?
After listening to Dominique Strauss-Kahn’s speech at the CGD-SAIS conference on April 23, I almost had to pinch myself: new lending instruments without conditionality and without pre-established limits? Stand-by agreements with social conditionality—that is, requirements designed to protect the poorest? These are very important steps for an institution, which until recently, developing countries saw as the “bad cop” for decades.
Donors, multilateral agencies, recipient countries, and NGOs supporting the Education for All–Fast Track Initiative (FTI) gather in Copenhagen this week for the 2009 FTI Partnership meeting. Participants will consider the preliminary findings of an independent evaluation team and seek solutions to the continuing challenges facing the FTI.
In its special report on the rise and fall of the wealthy, referring to the trends in income inequality in the United States The Economist (April 4-10th 2009, p. 3) states “… Another international study found that only Mexico and Russia had more unequal income distributions than America.” That is plain wrong.
If the commitments made last week by the heads of state at the G-20 meeting materialize quickly, this is good news indeed. The increase in available IMF and MDB resources for middle- and low-income countries, along with IMF’s announcement of a Flexible Credit Line which will allow countries to borrow amounts without pre-determined limits or conditionality, are crucial for helping these countries cope with the impact of the financial crisis.
As part of CGD’s efforts to track the impact of the financial crisis, I have been leading a series of conference calls to discuss how recent policy responses—or the lack thereof—may affect poor people in the developing world. Our latest call on the prospects for Russia suggests that the government could—and should—do more.
A friend who works in Wall Street was livid upon learning about the U.S. House of Representatives’ move to tax the controversial AIG bonuses at 90 percent. My friend—who is from Latin America and does not work at AIG—said that it looks like the United States is turning into Argentina. He was referring to last year when, in the midst of the commodity boom, the Argentine government attempted to raise the tax rate on the additional profits to around 90 percent and to increase its access to resources it nationalized the private pension plans.
For development aficionados, here are three notes and quotes worth remembering. My last (and late) dispatch will be posted tomorrow, and will outline my main frustration at Davos this year.
Last Wednesday the U.S. Federal Reserve Board announced that it had provided temporary liquidity swaps of $30 billion each with Brazil, Korea, Mexico, and Singapore, thereby significantly expanding the circle of countries that the Fed works with in this manner. This is a very welcome move.