International Monetary Fund

Trouble in Euro Zone Paradise?

February 24, 2012 by

The Europeans evidently thrive on instability and the ongoing threat of systemic risk. There is nothing else to explain the renewed hardline stance adopted by both Mario Draghi of the ECB and the German government on fiscal policy, just as the markets appeared to be calming down again.

The Post-WWI Years and the 21st Century

February 24, 2012 by

The world today and the world immediately before the Second World War are strikingly similar. The military and foreign policy of the United States today is comparable to the close-minded introversion of isolationism. European countries are teetering on the brink of economic collapse. The German industrial juggernaut has reignited. The announced rearmament of Russia resembles that of the former Soviet Union, during and immediately after the First World War.

NGOs Urge Open Selection Process for Next World Bank Chief

February 16, 2012 by

A global coalition of development activists and non- governmental organisations (NGOs) is calling on the World Bank’s governors to ensure that Bank President Robert Zoellick’s successor is chosen in an “open and merit-based process” that will give borrowing countries a major say in the selection. In an open letter released shortly after the Bank’s announcement Wednesday that Zoellick will step down at the end of his five-year term in June, some 60 groups and activists from around the world said any candidate should gain the “open support” of at least the majority of World Bank member countries and of the majority of low- and middle-income countries that make up most of its borrowers.

Greece: A Default is a Better Outcome Than the Deal on Offer

February 13, 2012 by

Pick your poison. In the words of Greek Finance Minister Evangelos Venizelos, the choice facing Greece today in the wake of its deal with the so-called “Troika” (the ECB, IMF, and EU) is “to choose between difficult decisions and decisions even more difficult. We unfortunately have to choose between sacrifice and even greater sacrifices in incomparably more dearly.” Of course, Venizelos implied that failure to accept the latest offer by the Troika is the lesser of two sacrifices.

Austerity in, Euro out – Is this Greece’s future?

February 13, 2012 by

As Greek politicians approved a tough austerity package amid fierce protests, one question dominates: is an orderly exit from the Eurozone available for Greece? And just what might be the consequences? Recently Citibank put the probability of such a Greek withdrawal in the next 18 months at 50%. Greece is seeking to finalise a deal with bank creditors on Greece’s private sector borrowings which would cancel €100 billion euros ($A125 billion) of its sovereign debt of over €350 billion.

Latin American Success: A Case for Comparative Advantage

February 7, 2012 by

The innovation and integration set in motion throughout Central and South America over the past decade is replacing the notion that effective market strategies must be devised within the zero-sum framework. Unifying socio-political schemes and initiating region-centric policies has made regional comparative advantage Latin America’s primary focus over the past decade.

On Exceptionalism and Deviance

January 15, 2012 by

The Wall Street Journal recently carried a speculative article by Ian Tally suggesting a link between the International Monetary Fund’s bailout loans to the European Union’s worst hit economies and sanctions against Iran. In essence, the article said that the Obama administration would likely support bailout loans to Greece, Italy and Spain in exchange for the EU agreeing to an embargo on Iran’s oil.

Burma Release, Ceasefire Hailed by Obama, Rights Groups

January 14, 2012 by

The administration of U.S. President Barack Obama Friday hailed the release by the Burmese government of hundreds of political prisoners, suggesting that it went far toward satisfying Washington’s conditions for fully normalising ties between the two countries. In a statement released by the White House after the first releases were confirmed, Obama called it a “crucial step in Burma’s democratic transformation and national reconciliation process”.

Greece in 2011: Argentina in 2002 Redux?

December 14, 2011 by

The Greek tragedy of sovereign debt, the overlay of a potential for regional recession, social turmoil, perceptions of structural corruption, and political theatrics and brinkmanship is all too familiar. This is reminiscent of Argentina in 2002, which remains the largest sovereign debt default in economic history.

Central banks’ credit lifeline will keep global economy liquid, but not afloat

December 2, 2011 by

For European banks threatened by a looming credit squeeze, the US Federal Reserve’s move to cut the cost of obtaining US dollars rescue hasn’t come a moment too soon. The Fed’s decision to engage in quantitative easing is the result of coordinated action between a number of the world’s major central banks, including the European Central Bank (ECB), the Bank of Japan, the Bank of England the Bank of Canada and Switzerland’s National Bank.

Asia and global governance

October 15, 2011 by

The expansion of the G7 to the G20, thereby incorporating Asia, is a welcome step. Economic power relations have changed considerably in the past decade or so and it was thus only natural that the global governance architecture should begin to reflect this new reality. The efforts of the G20 in tackling the 2008–2009 global crisis reinforced the efficacy of this initiative.

Bill Clinton Is Baaaaaaaaack!

October 4, 2011 by

The New York Times reported last week that former President Bill Clinton is working on a new book on economic policy to be released in time for next year’s election. This is unfortunate, since Clinton stands alongside Alan Greenspan as one of the last people who should be giving the country and the world advice on economic policy.

Eurozone Has A Crisis of Policy Failure, Not Debt

September 28, 2011 by

Three months ago I wrote here about the risks that the European authorities were posing to the U.S. economy and asked what the U.S. government was going to do about it. It was clear at that time that “the Troika” – the European Commission, European Central Bank (ECB), and the International Monetary Fund (IMF) – was once again playing a dangerous game of brinksmanship, at that time with the government of Greece.

What does China want in international economic reforms?

September 25, 2011 by

The current international economic system is defined by three key features. First, the United States is a dominant leader in designing and enforcing the international economic rules. Second, the US dollar is the cornerstone of the international monetary system. Third, three international organisations — the International Monetary Fund (IMF), World Bank (WB) and World Trade Organisation (WTO) — are responsible for maintaining order in the international economy.

Pakistan may bank on survival without IMF

September 19, 2011 by

Pakistan may try to do without help from International Monetary Fund loan programs, including the suspended US$11.3 billion standby arrangement which ends on September 30. Officials reckon its existing resources are sufficient to do without, even as repayment of debts comes due.

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