The IMF is a poisoned chalice

For how much longer should we give those who run the global economy the benefit of the doubt? The International Monetary Fund has made the same "mistake" so many times that only one explanation appears to remain: it is an engineering disaster.

The crises over which it has presided in Thailand, South Korea, Russia and Argentina are well-documented by Joseph Stiglitz, the former chief economist of the World Bank, among others. But we have, until now, lacked a comprehensive description of the way it worked in eastern Europe. A new book by the economist Pongrac Nagy* shows for the first time how the IMF smashed Hungary.

Communist economic management was hopeless: coercive, unaccountable, incompetent and wasteful. So when Hungary began to democratise in the late 1980s, it was plain that a new economic system was required. There were a number of options for transition. But before anyone had considered them, Hungary's naive and trusting new government was persuaded by the western powers that it had no alternative but to turn to the IMF.

Unless a country's economic policy is approved by the IMF, it cannot obtain foreign capital...

http://www.mg.co.za/Content/l3.asp?ao=19281

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