"Those are tasks beyond the IMF's traditional role, and may require the fund to show more spine in dealing with its largest members than it has managed in the past. The leaders agreed to quadruple the financial capacity of the IMF with a $1 trillion commitment.While the Economist still marvels at the charisma of the man who is even forgiven for mispronouncing Medvedev's name, and Der Spiegel has an elaborate metaphor on how the greedy Wall Street guys were only the dealers, not the growers of drugs (those were, naturally, in the White House), Joseph Stiglitz predicts that things will get worse before they might not get better, or something.
The G-20 also worked to clamp down on tax havens and to tighten financial regulations, bringing large hedge funds and financial institutions into the global regulatory net. The G-20 wants to register hedge funds with domestic regulators, disclose how much they have borrowed and to make sure there is effective oversight, even if the fund operates across borders."
WSJ: World Leaders Agree on Global Response , April 3, 2009
Friday 3 April 2009
The drug-metaphor can only go so far
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2 comments:
Somehow, I see the third world becoming debtors again? Ok, since you are currently an expert on this, you should enlighten me now?
Definitely not an expert, but thanks -
I think "Third World" is probably not the best way to think about this: there are a variety of different circumstances here and it really depends more on the country or the region. The crisis is probably going to hit those countries worse that have a government that doesn't work, or those that are on the brink of becoming a failed state. Producers of raw materials will probably face newly erected trade barriers, tariffs and all that. On the other hand, some countries have been involved in the search for ways out of the crisis, like for example Ethiopia at the G-20, and it was explicitly discussed how the crisis relates to problems of poverty and development.
There is certainly a connection, and what will happen in Europe and the US and especially Asia is naturally going to affect on countries that rely on international help - but this is just one of many cases where we'll have to wait and see what happens.
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