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Business Other News 22 Jul 2019 IMF & WB: 75 years a ...

IMF & WB: 75 years as financial firefighters

DECCAN CHRONICLE.
Published Jul 22, 2019, 5:12 am IST
Updated Jul 22, 2019, 5:12 am IST
The IMF and World Bank were created July 22, 1944 in the shadow of World War II to help rebuild Europe and later Japan.
International Monetary Fund
 International Monetary Fund

Washington: At the critical moment of a Hollywood movie starring Sandra Bullock, Boli-via's newly elected president calls in the International Monetary Fund to bail out the pooor country, violating a campaign promise. The streets then erupt in violent protest.

The movie, Our Brand is Crisis, is a fictionalised version of the 2002 Bolivian elections and its writers knew the IMF would be unquestionably accepted as the arch enemy of the people.

 

After 75 years putting out financial fires around the world, the IMF and World Bank face criticism for repeatedly failing to prevent crises and for making things worse for the people they were meant to help. That makes them easy scapegoats.

Even if the criticism is not always entirely fair, the institutions have been trying to rebrand themselves in recent years, putting more emphasis on protecting vulnerable members of society.

But they will need more than a better communications strategy as they contend with a wave of anti-globalisation sentiment and technological transformation, while also helping Africa through a very expensive transition. The challenges "are huge," World Bank Presi-dent David Malpass said.

The IMF and World Bank were created July 22, 1944 in the shadow of World War II to help rebuild Europe and later Japan, and to try to head off the kind of economic strife that had led to the war. "The original concept of reconstruction and development ...was clarified to include poverty alleviation as the bank grew," Malpass said.

On the surface, their record, especially for the IMF, seems dismal, with each of the prior three decades marked by a severe crisis: the Latin American debt crisis in the 1980s, the Asian and Russian crises in the 1990s and the global financial crisis in 2007, which begat the Great Recession that still looms over the world economy.

In each case, the damage lasted for a decade or more. But at the same time extreme poverty has plummeted worldwide— falling by a billion people since 1990.

"In the history of the world there has never been so much progress in improving people's lives as we have seen in the last 75 years," said Masood Ahmed, who worked alternately at the IMF or World Bank for nearly half their existences. But the institutions missed the problems growing beneath the surface.

“We glossed over the fact that there were many people who were increasingly uncomfortable with the pace of change," said Ahmed. "And I think we're paying a bit of a price for that now."

—AFP

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