In My Opinion IMF should fix rift with Latin America By Andres Oppenheimer Miami Herald (November 9, 2013) WASHINGTON - Judging from what International Monetary Fund Managing Director Christine Lagarde told me in an interview a few days ago, the IMF is working hard to stop being Latin Americas favorite villain. There are good reasons why it should do so: The IMF is scheduled to hold in 2015 its first annual meeting in Latin America since 1967 in Lima, Peru, and many anticipate violent protests. If there is one thing that unites the left and center-left in most countries in the region, and even parts of the right, its the belief that the IMF has impoverished their nations by demanding too much austerity measures in exchange for its loans. The Washington-based IMF lends money to debt-ridden countries that are in the midst of financial crises. But its emergency rescue loans have often come with stringent conditions, such as deep cuts in public spending, which have enraged recipient countries. I asked Lagarde: Hasnt the IMF made mistakes in Latin America by demanding too much austerity? I dont want to rewrite history, but I will say one thing: I think we now are paying more attention to the population that is most exposed, she answered. In the programs that we design, we have more social safety nets, we have more focus on those that do not have much, and that should be protected. Does that mean that the IMF is demanding less belt tightening? A different belt tightening. A belt tightening that is better designed to protect the poorest, she said. Lagarde avoided using the word mistakes, saying there is an open question on whether crisis-ridden countries should take their medicine hard and quickly, or take a milder medicine over a longer period of time. Most recently, there has been growing support for the latter, she said. She said the IMF has introduced, among other things, flexible credit lines to allow countries to strengthen their foreign reserves and avoid financial crises, and more focalized conditionality programs that seek to avoid hurting the poor. In addition, the IMF has become more flexible on Latin American countries measures to control capital movements, which it opposed until recently, and is making progress in talks to give a greater representation to emerging countries on its board, she said. Isnt she afraid that protesters will throw eggs at her when the IMF goes to Lima, Peru, in 2015? Be it as it may, I can tell you that I personally look forward to that 2015 meeting in Lima, she responded. She added that the IMF is working very closely with Peru, and that the country will greatly benefit from the estimated 15,000 foreign visitors who are expected to attend. Asked about the IMFs economic projections for next year, she said that 2014 will be a bit better than 2013 across the board, with rich countries recovering somewhat faster than developing ones. Latin America is expected to grow by about 3.1 percent next year, up from 2.7 percent this year, she said. When I asked her which Latin American economies she expects to do best, she mentioned Mexico, Chile, Colombia and Peru.
Posted on: Mon, 11 Nov 2013 18:01:40 +0000
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