[Fwd: Wallerstein: Camdessus is worried (fwd)]] (fwd)

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>Date: Thu, 17 Feb 2000 13:54:10 -0500
>X-PH: V4.4@orb3
>From: christopher chase-dunn <chriscd@xxxxxxx>
>Subject: [Fwd: [Fwd: [stop-imf] Wallerstein: Camdessus is worried (fwd)]]
>To: WORLD SYSTEMS NETWORK <wsn@xxxxxxxxxxxxxxxx>
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>Organization: Sociology Department, Johns Hopkins University, Baltimore,
> MD. 21218 USA
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>Comment No. 34, Feb. 15, 2000
>"The Head of the IMF: A Secret Radical?"

>Sometimes, when important persons take leave of their public life,
>they feel the need to make a bow to historical truth and seek to be
>remembered for more virtuous analysis than they normally had made
>earlier. This was the case when the last military man to be a
>president of the United States, Dwight Eisenhower, gave his farewell
>address in 1961. In that speech, he warned against the dangers that a
>"military-industrial complex" was coming to control the decisions of
>the U.S. government. This has been a theme ever since of the U.S.
>left but it has not been a theme frequently repeated by subsequent
>Republican politicians.
>
>The story may turn out to be similar with the "farewell speech" of
>Michel Camdessus, Managing Director of the International Monetary
>Fund (IMF). On Feb. 13, 2000, the day before he was to leave office
>after 13 years (the longest term of any Managing Director), Camdessus
>addressed the Tenth United Nations Conference on Trade and
>Development in Bangkok. He said some very radical things.
>
>He started by noting what he called the paradox of the present world
>economic situation: "promise - unprecedented prospects in certain
>fields - but financial instability and 'exclusion,' the so cruel
>situation of the poorest and the anxieties of so many in the world."
>He said we must recognize that "there are serious reasons for this
>anxiety." He called on everyone to "recognize that poverty is the
>'ultimate threat' to stability in a globalizing world."
>
>After all the speeches we have had from the IMF and its ideological
>consorts about the primacy of growth as an economic objective,
>Camdessus now tells us: "It is recognized that the market can have
>major failures, that growth alone is not enough, or can even be
>destructive of the natural environment or precious social goods and
>cultural values. Only the pursuit of high-quality growth is worth the
>effort."
>
>Camdessus italicized "high-quality." And he proceeded to define this
>term in language one usually hears from the critics of the IMF:
>"growth that can be sustained over time without causing...imbalance;
>growth that has the human person at its center...; growth...based on
>a continuous effort for more equity, poverty alleviation, and
>empowerment of poor people; and growth that promotes protection of
>the environment, and respect for national cultural values."
>
>And from this point, Camdessus moves on to virtual populism: "Popular
>support for stabilization and reform cannot be counted upon, unless
>the whole population. including the poorest - and by the poorest I
>mean those that not only are out of the loop, but even more are
>unable to contribute their experience - is able to participate in the
>formulation of the policies and, of course, in the benefits from
>those policies." Camdessus attributes the anxiety that is widespread
>to the fact that globalization "has not yet demonstrated that it is
>concerned enough, or capable of overcoming the great concern of our
>times." And that concern, he says, is poverty.
>
>As recently as the latest Davos conference, we were being assured
>that a rising tide raises all ships, and that globalization would
>prove of benefit to everyone. But no, says our secret radical, the
>Managing Director of the IMF, "the widening gaps between rich and
>poor within nations, and the gulf between the most affluent and most
>impoverished nations, are morally outrageous, economically wasteful,
>and potentially socially explosive." Widening gaps? There are those
>of us who have argued this for a long time, but only now have we had
>the assent of the IMF, at least the rhetorical assent. Perhaps the
>gaps have grown to be so wide and so obvious they can no longer be
>hidden from the blindest.
>
>Furthermore, says Camdessus, "poverty is no longer inevitable, if it
>ever has been..."
>
>What then should we do? Camdessus recommends a five-point program for
>the poor countries. Points two to four are standard gospel: sound
>macroeconomic policies, promotion of the free market, and a web of
>laws that support the functioning of markets. But see point number
>one: "country-driven strategies that make poverty alleviation the
>centerpiece of economic policy...." And point five: "well-targeted
>and cost-effective social safety nets, a shift in public spending
>towards basic social services in education and health care, and
>efforts to provide income-earning opportunities for the poor."
>
>And what does he recommend for the "development partners" of the poor
>countries? First of all, "unrestricted market access for all exports
>from the poorest countries, including the HIPCs [heavily-indebted
>poor countries]." And "backing up all the pledges to reduce poverty
>with financial support." The excuse of "aid fatigue," Camdessus says,
>"is not credible." And one more surprising suggestion: "restraining
>the sales of military equipment to sensitive regions; abolishing the
>provision of export credit for military purposes."
>
>To reassure us that he hasn't yet joined the ranks of the
>demonstrators in Seattle, Camdessus does end with a fairly standard
>list of four broad areas in which multilateralism should be enhanced:
>liberalization of trade, liberalization of payments, liberalization
>of capital movements, and (to guarantee the first three) the
>strengthening of the international financial architecture. However,
>even there, as an example of new architecture, he proposes replacing
>the G7-G8 Summit with a meeting of about 30 countries, all those "who
>have Executive Directors on the Boards of either the IMF or the World
>Bank," because this would be "a representative grouping of world
>leaders with unquestionable legitimacy." So obviously he feels that
>the G7-G8 does not have "unquestionable legitimacy."
>
>What are we to make of this speech, which will not pass unnoticed? I
>think we should not persuade ourselves that it means that the leaders
>of world capitalism have suddenly become egalitarians. Rather, we
>should view it as meaning that the intelligent among them are
>genuinely worried. But worried about what? About two things
>essentially: The first is a financial crash. In an interview
>following the speech, Camdessus said: "I am ringing the alarm bell to
>our member countries to tell them that we run the risk of a new
>financial crisis." He particularly pointed to the U.S. economy, whose
>"low rate of savings, rapidly growing current-account deficit and
>high stock prices were cause for concern." And there are "also
>worrying vulnerabilities in other parts of the world." And worst of
>all, all this, he says, is "combined with complacency."
>
>The second cause for worry is the widespread popular rejection of
>so-called globalization. It is this worry that is most fundamental.
>Camdessus furthermore is not alone. During the so-called Asian
>financial crisis of just a few years ago, the policies of the IMF
>itself were strongly criticized by senior world conservative figures
>like Henry Kissinger and Jeffrey Sachs precisely because the latter
>felt that IMF policies were neglecting the social consequences of its
>economic policies and would lead to populist disturbances, as they
>said it had already in Indonesia. Perhaps Camdessus was listening.
>
>The point is that when those in power are worried, there is usually
>something to worry about, for them. Camdessus is worried.


>Immanuel Wallerstein
>
>
>
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