IMF/World Bank: The Indictment

The IMF and the World Bank are about to hold their annual meeting in Washington, D.C. Other than discussing the markets and financial crises, the two institutions' performance is also under review. Ever since the 1999 Seattle protests, IMF/World Bank opponents and critics have focused global attention on this issue. Our new Read My Lips feature presents the critics’ viewpoints.

What is the difference between the IMF and the World Bank?

“I always compare the IMF to the Communist Party: A vanguard — very ideological, very top-down. When they make decisions, things really happen. The World Bank is more complex, more like a university.”

(Justin Forsyth, policy director of Oxfam, July 2002)

What real-life effects does this have?

"We give countries a choice: the wrong advice from the IMF straight away — or the right advice from the World Bank too late."

(Financial Times columnist Robert Chote, quoting an anonymous source, April 1998)

What about the institutions’ economic skills?

“IMF economic forecasts — along with those of other international organizations and the private sector — have an abysmal record. At the very least, they should provide a probability range.”

(Financial Times editorial, September 2001)

How do some countries look back on their work with the IMF?

“When a crisis happens, the first priority for a country such as Thailand should be to stay clear of the IMF.”

(Pasuk Phogpaichit and Chris Baker, authors of ‘Thailand’s Crisis’, October 2000)

Do the international financial institutions have a consistent plan?

“They play Pakistan one way, Ecuador another and Romania a third — depending on what U.S. policy priorities are.”

(Richard Portes, London Business School professor, May 2000)

How popular are IMF programs in other countries?

“The program being implemented has politically and economically oppressed Turkey. When we come to power, we will implement a new program — with production, employment and exports at its core.”

(Numan Kurtulmus, leader of the Turkish opposition party Saadet, April 2002)

How does a top African leader summarize this problem?

“It is as if we are determined to regress to the most primitive condition of existence in the animal world — the survival of the fittest.”

(South Africa’s President Thabo Mbeki, August 2002)

So what drives IMF policies?

“The IMF is a political institution.”

(Joseph Stiglitz, former World Bank Chief Economist and 2001 Nobel Prize Winner in Economics, June 2002)

What's the official view from Washington?

“When things really crater, the IMF rides in on its horse and throws money at everybody — and the private-sector people get to take their money out, and everything’s okay again.”

(Paul O’Neill, U.S. Secretary of Treasury, July 2001)

Are IMF/World Bank staffers being held responsible for their decisions?

“If a top IMF official makes the mistake of destroying the Indonesian banking sector by pushing the closing of the banks, he will be promoted to advise another country.”

(Rizal Ramli, Indonesia’s former Finance Minister, August 2002)

How does the IMF react to its critics?

“The fact that it was not possible to avoid the current difficulties in Latin America suggest that we still have a lot to learn.”

(Horst Köhler, IMF Managing Director, September 2002)

Finally, what's the word on the IMF from a prominent U.S. critic?

“Witch doctor agency of international finance.”

(Steve Forbes, Editor-in-Chief of Forbes, March 2001)