News Release

Whitewash of IMF Role Charged

WASHINGTON — A new report on the Asian economic crisis, put out by Washington’s best-known think tank on international economic issues, is drawing fire for its favorable assessment of the International Monetary Fund.

Released by the Institute for International Economics, the report is titled “The Asian Financial Crisis: Causes, Cures, and Systemic Implications.” It has come under swift attack from economists who question why IMF bailout policies — including high interest rates, spending cuts, and mass layoffs — were let off the hook in the report.

Among those available for comment are:

MARK WEISBROT
Research Director of the Preamble Center for Public Policy, Weisbrot said: “Everyone knows the IMF actually made the Asian crisis drastically worse. They threw gasoline on the fire, converting what was originally a financial crisis into a major regional depression with no clear end in sight.”

EDWARD HERMAN
Professor Emeritus of Finance at the Wharton School, University of Pennsylvania, Herman said: “The IIE analysis fails to mention that neither the IMF, World Bank, nor global market forces seriously objected to the rampant corruption institutionalized in Thailand and Indonesia under their lending regime until the collapse. This suggests that none of them can be relied on to assure the integrity of institutions or systems.”

CAROL WELCH
A policy analyst for Friends of the Earth, Welch said: “In crises like Indonesia’s when the IMF steps in and bails out private banks, the government has to guarantee the debt, and the poor and the environment are inevitably the first to suffer.” Welch added: “The IMF basically refuses reforms unless its money is threatened. The debate on Capitol Hill is critical, because it’s addressing the core issues of the IMF’s transparency and accountability.”

STEVE HELLINGER
President of the Development Group for Alternative Policies, Hellinger said: “The IIE analysis sees the IMF as the solution. In fact the IMF has been a major cause of the problem because it pushes countries into liberalizing their financial markets.”

For more information, contact Theresa Caldwell or Sam Husseini at the Institute for Public Accuracy, (202) 347-0020 or (301) 749-0310.