Is The IMF Worth It?
November 11, 1999
The International Monetary Fund has been the subject of increasing criticism recently, as observers have begun to conclude that it is not a solution to periodic financial panics in far-flung countries. Rather it is coming to be perceived as part of those very problems.
To qualify for IMF funds, countries must adopt IMF-sanctioned economic policies -- which include devaluing their currencies, sky-high interest rates, steep budget cuts and tax hikes. Economists say some of this advice is poison to reeling economies, squelching domestic demand and making a bad situation a whole lot worse.
Then there are the costs it imposes on stable, developed economies which finance its activities:
- Staffing has grown 5 percent annually over the past decade and the average IMF worker makes about $114,000 a year.
- The agency has more than 80 division directors, each making more than $180,000 a year -- plus benefits.
- Since 1990, IMF lending has soared by about 100 percent.
- Its assets now total more than $80 billion.
Carnegie Mellon University economist Allan Meltzer estimates the IMF has played a role in causing almost 100 banking crises in the developing world in the last 15 years.
Source: Macroscope, "Au Revoir," Investor's Business Daily, November 11, 1999.
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