Sir, - Your editorial of January 13th on the Asian crisis raises the question of who rules the global economy we are fast-tracking into at dizzying speed. The answer appears to be the US, working through international organisations such as the IMF.
The IMF is a public body, receiving public money, and should therefore follow democratic principles. Decision-making, however, operates on the principle one-dollar-one-vote, not one-country-one-vote. As a result, while developing countries form three-quarters of the IMF membership, they hold only one-third of the votes. The US holds the balance of power. This reveals the power relations which underpin one of the major financial institutions, whose mandate is to oversee global finances.
You highlight the growing criticism of the deflationary policies pushed by the IMF on the Asian tigers. Equally inappropriate policies have been forced on African and other low-income economies in Latin America and Asia over the past decade-and-a-half, with disastrous effects.
The IMF's constitution states the primary objective of economic policy is "to promote high levels of employment and real income and the development of the productive resources of all its members." Something has gone radically wrong. If we are to have any semblance of democracy in a globalised world, radical reform is needed. While the IMF may not impinge very much on our lives here in Ireland, the opposite is true for people across developing countries. A placard carried by Korean workers on a recent demonstration simply stated "IMF=I'm fired"
The IMF has quickly found $35 billion to bail out Thailand, Indonesia and Korea - they are of strategic interest to the US. The IMF has not managed to raise a mere $0.6 billion to $0.9 billion to fund its share of a debt-relief scheme for the heavily indebted low-income countries, agreed almost a year-and-a-half ago.
Of course it is not the people of Thailand, Korea and Indonesia who are being bailed out; the crisis will cost them dear. It is the speculators in to make a quick killing who are being insulated. The principle seems to be that while profits return to private owners, when debts become colossal enough they are nationalised and fall on the taxpayer.
Yes, certainly, as your editorial argues, alternatives to current US/ IMF policies must be found, but a prerequisite for promoting these is democratisation of the IMF. - Yours, etc.
From Jean Somers
Co-ordinator, Debt and Development, Coalition Ireland, All Hallows, Grace Park Road, Dublin 9.