Views of a Nepali Economist

On December 20, I published an opinion piece titled "Unfair Play" in the Republica daily discussing the role of IMF, and arguing why I prefer Nepal not deal with the IMF. I wrote that:

...IMF acts and imposes these programs like a schoolyard bully. Time and again it has been heavy-handed in dealing with poor countries that have little say in the international arena. Yet, at the same time, it cannot speak a word against the heavy donors that “fund” the Fund.

...The IMF has, time and again, been unable to rein its richer ponies.

...no matter what the cause of macroeconomic problem (in any country in any corner of the world), the IMF’s most common solution is to ask countries to reduce inflation...For an organization that boasts of many eminent scholars, researchers and bureaucrats, the IMF’s dogged inflationary stance makes it look like a one-trick pony.

...The IMF says that restructuring is a pre-condition to its assistance. Why are such pre-conditions not applied when the richer countries borrow from IMF?

...for an organization that touts itself as a watchdog, and one that seeks openness from its clients, the IMF is very secretive. Independent observers say a serious appraisal of IMF programs and policies is nigh on impossible.

...When the global financial crisis started to bite in late 2008, the IMF was very flexible to the European countries that asked for emergency loans to survive the crisis. Yet, it spared no mercy for Pakistan, Bangladesh and the African countries....IMF has a double-standard when it comes to applying its pre-conditions. That’s unfair.

I concluded by saying that:

If the rules do not apply equally to all players of the game, I don’t want my country playing that game at all.

Then, a few days later, Republica published an interview with Laurence Brahm, lawyer, political-economist and author of dozens of books, founded the Himalayan Consensus and African Consensus movements. The following is what Brahm has to say about international organizations like the IMF and World Bank:

Nepal does not need World Bank or IMF money. Open up certain sectors to foreign investment and control the sectors you are not ready to open yet. Bring in capital from neighboring countries who will invest. Evolve your core infrastructure, roads and power. Telecommunications as well—you have bright people and a tech industry could be in the making. Protect your natural resources and land because tourism is the best export. Ecology and heritage tourism can be sustainable as well as protect culture and diversity of your environment. Do not lose these things in the name of progress. Once lost, they cannot be brought back.

Labels: IMF, laurence brahm, world bank