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COMMERCIAL POLICY BY ALEJANDRO VELEZ, PH.D. COMMERCIAL POLICY

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commercial policy

COMMERCIAL POLICY

BY

ALEJANDRO VELEZ, PH.D.

S. Hernandez, E. Gonzalez,D. Bejarano, L. Cabanilla,F.Lopez, A. Velez,R.Valencia, R.Ashley, S.Torres,J. Hinojosa, K. Collins, D.Stanko, J. Monterey

commercial policy2
COMMERCIAL POLICY
  • A WHOLE HOST OF ACTIONS BY SOVEREIGN GOVERNMENTS WHICH TRADITIONALLY HAVE CENTERED ON REGULATING IMPORTS (AND SOMETIMES EXPORTS, E.G., US SUPER COMPUTERS) BUT WHICH CAN ALSO INCLUDE POLICIES ON INVESTMENTS, THE ENVIRONMENT. LABOR, ETC.

S. Hernandez, E. Gonzalez,D. Bejarano, L. Cabanilla,F.Lopez, A. Velez,R.Valencia, R.Ashley, S.Torres,J. Hinojosa, K. Collins, D.Stanko, J. Monterey

commercial policy3
COMMERCIAL POLICY
  • HOW DOES THE US PROPOSE AND

AND ENACT COMMERCIAL POLICY LEGISLATION?

  • DIFFERENTLY FROM OTHER DME’S!
  • HOW?
  • ______ AUTHORITY

S. Hernandez, E. Gonzalez,D. Bejarano, L. Cabanilla,F.Lopez, A. Velez,R.Valencia, R.Ashley, S.Torres,J. Hinojosa, K. Collins, D.Stanko, J. Monterey

commercial policy4
COMMERCIAL POLICY
  • POLITICAL PARTIES AND PRESIDENTS HAVE VARIED IN APPROACHES BUT THERE HAS BEEN UNEXPECTED COMMONALITIES. I THINK ECONOMISTS HAVE BEEN A MAJOR REASON. CEA MAGNIFIED OUR INFLUENCE. GOOD RESEARCH AND PRESTIGE OF PROFESSION, ETC.

S. Hernandez, E. Gonzalez,D. Bejarano, L. Cabanilla,F.Lopez, A. Velez,R.Valencia, R.Ashley, S.Torres,J. Hinojosa, K. Collins, D.Stanko, J. Monterey

commercial policy5
COMMERCIAL POLICY
  • THE STRANGE CONVERSION OF WILLIAM J. CLINTON TO A FREE TRADER.
  • AL GORE MAY NOT BE SO CONVINCED??
  • NADER, BUCHANAN MAY BODE POORLY FOR FREE TRADE?

S. Hernandez, E. Gonzalez,D. Bejarano, L. Cabanilla,F.Lopez, A. Velez,R.Valencia, R.Ashley, S.Torres,J. Hinojosa, K. Collins, D.Stanko, J. Monterey

us commercial policy
US COMMERCIAL POLICY
  • PRE-GATT

S. Hernandez, E. Gonzalez,D. Bejarano, L. Cabanilla,F.Lopez, A. Velez,R.Valencia, R.Ashley, S.Torres,J. Hinojosa, K. Collins, D.Stanko, J. Monterey

us commercial policy7
US COMMERCIAL POLICY
  • GATT UP TO COLLAPSE OF SOVIET UNION

S. Hernandez, E. Gonzalez,D. Bejarano, L. Cabanilla,F.Lopez, A. Velez,R.Valencia, R.Ashley, S.Torres,J. Hinojosa, K. Collins, D.Stanko, J. Monterey

us commercial policy8
US COMMERCIAL POLICY
  • 1989 TO LAUNCHING OF WTO

S. Hernandez, E. Gonzalez,D. Bejarano, L. Cabanilla,F.Lopez, A. Velez,R.Valencia, R.Ashley, S.Torres,J. Hinojosa, K. Collins, D.Stanko, J. Monterey

us commercial policy9
US COMMERCIAL POLICY
  • WTO
    • URUGUAY ROUND
    • ISSUES (INTELLECTUAL PROPERTY, SERVICE TRADE, BANKING/INVESTMENT, AGRICULTURAL SUBSIDIES, STEEL-CHEMICALS,
    • ACCOMPLISHMENTS

S. Hernandez, E. Gonzalez,D. Bejarano, L. Cabanilla,F.Lopez, A. Velez,R.Valencia, R.Ashley, S.Torres,J. Hinojosa, K. Collins, D.Stanko, J. Monterey

reform of imf world bank a case study
REFORM OF IMF, WORLD BANK: A CASE STUDY
  • MELTZER REPORT
    • BACKGROUND (R.V.,R.A.,L.C.,T.P.)
    • PROPOSALS (E.G.,S.H.,D.B.)
    • PROS AND CONS(J.H.,K.C.,D.S.,J.M.)
    • CONCLUSIONS (S.T., A.V.)

S. Hernandez, E. Gonzalez,D. Bejarano, L. Cabanilla,F.Lopez, A. Velez,R.Valencia, R.Ashley, S.Torres,J. Hinojosa, K. Collins, D.Stanko, J. Monterey

meltzer commission background

Meltzer Commission (Background)

International Economics

S. Hernandez, E. Gonzalez,D. Bejarano, L. Cabanilla,F.Lopez, A. Velez,R.Valencia, R.Ashley, S.Torres,J. Hinojosa, K. Collins, D.Stanko, J. Monterey

international financial institution advisory commission
International Financial Institution Advisory Commission
  • Established in 1998 to oversee American funding in International Financial Institutions
  • Had a very short life (6 months) and made many findings

S. Hernandez, E. Gonzalez,D. Bejarano, L. Cabanilla,F.Lopez, A. Velez,R.Valencia, R.Ashley, S.Torres,J. Hinojosa, K. Collins, D.Stanko, J. Monterey

reasons for establishment
Reasons for Establishment
  • Congress wanted to know what good was coming from money that was used for Foreign Aid
  • Assessment of International Financial Institutions was wanted for the financing of future Foreign Aid Programs

S. Hernandez, E. Gonzalez,D. Bejarano, L. Cabanilla,F.Lopez, A. Velez,R.Valencia, R.Ashley, S.Torres,J. Hinojosa, K. Collins, D.Stanko, J. Monterey

reasons for establishment cont
Reasons for Establishment (cont.)
  • Oversee roles of seven international financial institutions
    • IMF
    • World Bank
    • Inter-American Dev. Bank
    • Asian Dev. Bank
    • African Dev. Bank
    • WTO
    • Bank for International Settlements

S. Hernandez, E. Gonzalez,D. Bejarano, L. Cabanilla,F.Lopez, A. Velez,R.Valencia, R.Ashley, S.Torres,J. Hinojosa, K. Collins, D.Stanko, J. Monterey

votes of the commission
Votes of the Commission
  • Write-off all claims against HIPCS(heavily indebted poor countries)
  • End practice of extending long-term loans for poverty reduction

S. Hernandez, E. Gonzalez,D. Bejarano, L. Cabanilla,F.Lopez, A. Velez,R.Valencia, R.Ashley, S.Torres,J. Hinojosa, K. Collins, D.Stanko, J. Monterey

exchange types
Exchange Types
  • Bretton Woods (Fixed on the Dollar)
    • Establishes the IMF and World Bank to help in the redevelopment of torn countries from WWII
    • Aid was based on a fixed rate system
  • “Dirty Float” (No more fixed rates)
    • Causes problems with initial plans of IMF and World Bank- they were established to work with a fixed exchange rate
    • GATT established in 1948 to reduce tariff barriers.
    • WTO replaces GATT in 1995

S. Hernandez, E. Gonzalez,D. Bejarano, L. Cabanilla,F.Lopez, A. Velez,R.Valencia, R.Ashley, S.Torres,J. Hinojosa, K. Collins, D.Stanko, J. Monterey

problems of institutions
Problems of Institutions
  • High Cost with Low Effectiveness

S. Hernandez, E. Gonzalez,D. Bejarano, L. Cabanilla,F.Lopez, A. Velez,R.Valencia, R.Ashley, S.Torres,J. Hinojosa, K. Collins, D.Stanko, J. Monterey

reform of imf world bank
REFORM OF IMF, WORLD BANK
  • MELTZER REPORT
    • POLITICS

S. Hernandez, E. Gonzalez,D. Bejarano, L. Cabanilla,F.Lopez, A. Velez,R.Valencia, R.Ashley, S.Torres,J. Hinojosa, K. Collins, D.Stanko, J. Monterey

reform of imf world bank19
REFORM OF IMF, WORLD BANK
  • MELTZER REPORT
    • ISSUES

S. Hernandez, E. Gonzalez,D. Bejarano, L. Cabanilla,F.Lopez, A. Velez,R.Valencia, R.Ashley, S.Torres,J. Hinojosa, K. Collins, D.Stanko, J. Monterey

major proposals of the bank for international settlements

Major Proposals of the Bank for International Settlements

Proposals for Change and Growth

S. Hernandez, E. Gonzalez,D. Bejarano, L. Cabanilla,F.Lopez, A. Velez,R.Valencia, R.Ashley, S.Torres,J. Hinojosa, K. Collins, D.Stanko, J. Monterey

three categories of the bis s tasks
Three Categories of the BIS’s Tasks
  • International Monetary and Financial Cooperation
  • Agent and Trustee activities
  • Financial Assistance to Central Banks

S. Hernandez, E. Gonzalez,D. Bejarano, L. Cabanilla,F.Lopez, A. Velez,R.Valencia, R.Ashley, S.Torres,J. Hinojosa, K. Collins, D.Stanko, J. Monterey

role of the bis
Role of the BIS
  • Acts as secretariat for several committees who propose international standards and offer guidance on so called “best practices”.

S. Hernandez, E. Gonzalez,D. Bejarano, L. Cabanilla,F.Lopez, A. Velez,R.Valencia, R.Ashley, S.Torres,J. Hinojosa, K. Collins, D.Stanko, J. Monterey

bis proposals
BIS Proposals
  • The Capital Accord, set minimum capital standards for international banks.
  • It called for linking capital requirements to a crude measure of the banks’ risk by assigning different risk weights for different categories of bank assets or commitments.

S. Hernandez, E. Gonzalez,D. Bejarano, L. Cabanilla,F.Lopez, A. Velez,R.Valencia, R.Ashley, S.Torres,J. Hinojosa, K. Collins, D.Stanko, J. Monterey

capital adequacy framework
Capital Adequacy Framework
  • Expected to give banks more choice in assessing credit risk by allowing them to adopt an internal rating system.
  • This is used to set capital requirements and by linking required capital, where possible, to credit-rating agencies’ ratings of bank borrowers.

S. Hernandez, E. Gonzalez,D. Bejarano, L. Cabanilla,F.Lopez, A. Velez,R.Valencia, R.Ashley, S.Torres,J. Hinojosa, K. Collins, D.Stanko, J. Monterey

slide25
Conditions for Supervision

Licensing

Structure of the Banking System

Prudential Regulation

Methods of ongoing supervision

Information gathering and use

Powers of Supervisors

Cross-border Banking

Basal Committee on Banking Supervisions’ 25 Core Principles for Effective Banking Supervision (Principles Covered)

S. Hernandez, E. Gonzalez,D. Bejarano, L. Cabanilla,F.Lopez, A. Velez,R.Valencia, R.Ashley, S.Torres,J. Hinojosa, K. Collins, D.Stanko, J. Monterey

other proposals of the bis
Other Proposals of the BIS
  • The Commission recommends that the BIS remain a financial standard setter.
  • Implementation of standards, and decisions to adopt them should be left to domestic regulators or legislatures.
  • The Basel Committee on Bank Supervision should align its risk measures more closely with credit and market risk. Current practice encourages misallocation of lending.

S. Hernandez, E. Gonzalez,D. Bejarano, L. Cabanilla,F.Lopez, A. Velez,R.Valencia, R.Ashley, S.Torres,J. Hinojosa, K. Collins, D.Stanko, J. Monterey

continuation of bis proposals
Continuation of BIS Proposals
  • Some streamlining of the BIS organizational structure would be desirable
  • The Commission recommends that any expansion of membership in the BIS or its committees or groups be undertaken gradually and deliberately to avoid disruption of the information exchange that central bakers find valuable.

S. Hernandez, E. Gonzalez,D. Bejarano, L. Cabanilla,F.Lopez, A. Velez,R.Valencia, R.Ashley, S.Torres,J. Hinojosa, K. Collins, D.Stanko, J. Monterey

the development banks
Created from the Bretton Woods system, the World Bank is an institution where rich industrialized nations gather money in markets to distribute funds as loans to emerging members.

The eventual goal: the Alleviation of Poverty Worldwide

The Development Banks

S. Hernandez, E. Gonzalez,D. Bejarano, L. Cabanilla,F.Lopez, A. Velez,R.Valencia, R.Ashley, S.Torres,J. Hinojosa, K. Collins, D.Stanko, J. Monterey

multilateral banks
Multilateral Banks
  • World Bank Group, Asian Development Bank, Inter-American Development Bank, and African Development Bank
  • World Bank thought that three banks could serve their constituencies better than a distant institution dominated by industrial countries.
  • Served as a dominant source of international resources to emerging economies up until the 1980’s.

S. Hernandez, E. Gonzalez,D. Bejarano, L. Cabanilla,F.Lopez, A. Velez,R.Valencia, R.Ashley, S.Torres,J. Hinojosa, K. Collins, D.Stanko, J. Monterey

problems with development banks
Problems with Development Banks
  • Cold War ended, strategic gesture became outmoded
  • New generation of public and private leadership arose in developing nations.
  • Dev. Banks differ in financial size; Africa is the smallest with 5-10% of the total amount.
  • Relative importance of banks has been declining.
  • In past 7 years, WB has lent $18 billion to LDC’s, as compared to the private sectors $1,450 billion.
  • WB must accept fact that they are no longer a significant source of funds to emerging economies.

S. Hernandez, E. Gonzalez,D. Bejarano, L. Cabanilla,F.Lopez, A. Velez,R.Valencia, R.Ashley, S.Torres,J. Hinojosa, K. Collins, D.Stanko, J. Monterey

problems continued
Problems continued…
  • Developing banks claim they lend to countries with denied access to market financing and private investors…but, all of the banks lend mainly to most credit-worthy countries; basically those that have private investors there already.
  • International Bank for Reconstruction and Development (IBRD) lending to LDC’s has fallen from 40% to 1% in six years.
  • 70% of the WB money is loaned out to a dozen economies, while the remaining 30% is divided up by 145 developing countries.

S. Hernandez, E. Gonzalez,D. Bejarano, L. Cabanilla,F.Lopez, A. Velez,R.Valencia, R.Ashley, S.Torres,J. Hinojosa, K. Collins, D.Stanko, J. Monterey

problems continued32
Problems continued…
  • Crisis lending is IMF responsibility, not the WB’s.
  • Regional banks repeat the WB organizational structure. Recently, WB expanded its offices in some of the Regional bank areas only creating conflict, competition, and confusion.
  • Their patterns of lending in past 3 years are very similar: to the same countries and for the same purposes.
  • WB doesn’t need to pump in more money, the local banks and private investors can recover by themselves.

S. Hernandez, E. Gonzalez,D. Bejarano, L. Cabanilla,F.Lopez, A. Velez,R.Valencia, R.Ashley, S.Torres,J. Hinojosa, K. Collins, D.Stanko, J. Monterey

recommendations
Recommendations
  • Development Banks should be renamed as Development Agencies; it would define their role as the alleviators of poverty world wide.
  • Resource transfers to countries with a per capita income of <$4000 will be eliminated within five years; Starting at $2500, funding will be limited.
  • Funds expended based on “user fees.” “User fees” consist of working projects such as: vaccinated children, kilowatts of electricity delivered, cubic meters of water treated, passing literacy tests, miles of functioning roads…etc.

S. Hernandez, E. Gonzalez,D. Bejarano, L. Cabanilla,F.Lopez, A. Velez,R.Valencia, R.Ashley, S.Torres,J. Hinojosa, K. Collins, D.Stanko, J. Monterey

recommendations continued
Recommendations continued
  • If the countries show improvement in specific areas, the money will be granted. No results, no funds.
  • The supplier of the service receives the money, not the government.
  • An obligation to meet the “user fees” imposes the discipline on the country receiving assistance. This replaces the deferred 20-50 yr payment schedule.
  • If grants are given instead of loans, receiver countries would not have to pay back the principal and interest.

S. Hernandez, E. Gonzalez,D. Bejarano, L. Cabanilla,F.Lopez, A. Velez,R.Valencia, R.Ashley, S.Torres,J. Hinojosa, K. Collins, D.Stanko, J. Monterey

recommendations continued35
Recommendations continued
  • The grants may consume large quantities of money of the Development Agencies and they would have to ask member countries for more money. But this has a positive aspect. It forces the Dev. Agencies to have better performance and credibility to ask for more funding.
  • Services would be performed by outside private-sector providers (NGO’s and charitable org.) or public-sector entities, and awarded on competitive bid.
  • Loans would be conditional upon a precise set of reforms, and disbursement would begin after institutional reforms are enacted.

S. Hernandez, E. Gonzalez,D. Bejarano, L. Cabanilla,F.Lopez, A. Velez,R.Valencia, R.Ashley, S.Torres,J. Hinojosa, K. Collins, D.Stanko, J. Monterey

recommendations continued36
Recommendations continued
  • Regional programs should be the primary responsibility of their Regional Agencies: Asian, Inter-American, and African Agencies. No overlap from the World Bank and its regional partners.
  • WB is principal source of aid for ADB until it can manage on its own. WB should be the responsible for the Mid-East and few remaining European countries.
  • Should concentrate on production of world goods such as: treatment for AIDS, safeguard natural resources, inter-country infrastructure systems…etc.

S. Hernandez, E. Gonzalez,D. Bejarano, L. Cabanilla,F.Lopez, A. Velez,R.Valencia, R.Ashley, S.Torres,J. Hinojosa, K. Collins, D.Stanko, J. Monterey

recommendations continued37
Recommendations continued
  • World Development Agency should reduce its role in the private-sector, only giving technical assistance and setting practice standards. Investment, guarantees, and lending to private sector should be eliminated.
  • Multilateral Investment Guarantee Agency (MIGA) should be eliminated. Many countries already have their own political insurance agencies.
  • WB and Regional Banks should write-off entirely their claims against all heavily indebted poor countries
  • The United States should spend more to alleviate poverty.

S. Hernandez, E. Gonzalez,D. Bejarano, L. Cabanilla,F.Lopez, A. Velez,R.Valencia, R.Ashley, S.Torres,J. Hinojosa, K. Collins, D.Stanko, J. Monterey

the meltzer commission

The Meltzer Commission

Chapter 5

The World Trade Organization

S. Hernandez, E. Gonzalez,D. Bejarano, L. Cabanilla,F.Lopez, A. Velez,R.Valencia, R.Ashley, S.Torres,J. Hinojosa, K. Collins, D.Stanko, J. Monterey

world trade organization gatt
World Trade Organization-GATT
  • Formerly known as GATT, the General Agreement on Tariff and Trade.
  • Two principle activities: agreements on nondiscriminatory reductions in tariff duties, quotas and other quantitative restrictions on trade in goods.
  • Managed dispute settlement procedures arising under the agreements.

S. Hernandez, E. Gonzalez,D. Bejarano, L. Cabanilla,F.Lopez, A. Velez,R.Valencia, R.Ashley, S.Torres,J. Hinojosa, K. Collins, D.Stanko, J. Monterey

slide40
WTO
  • WTO replaced GATT January 1, 1995.
  • WTO agreement incorporated and extended earlier GATT agreements.
  • It also made two important additions:

S. Hernandez, E. Gonzalez,D. Bejarano, L. Cabanilla,F.Lopez, A. Velez,R.Valencia, R.Ashley, S.Torres,J. Hinojosa, K. Collins, D.Stanko, J. Monterey

wto commission recommendations
WTO Commission Recommendations
  • Two general areas:
      • General Principles of operation
      • The role of the WTO in promoting financial stability, safety, and soundness.

S. Hernandez, E. Gonzalez,D. Bejarano, L. Cabanilla,F.Lopez, A. Velez,R.Valencia, R.Ashley, S.Torres,J. Hinojosa, K. Collins, D.Stanko, J. Monterey

general principles
General Principles
  • Two main functions:
    • administers the process by which trade rules change
    • the WTO serves as a quasi-judicial body to settle disputes.

S. Hernandez, E. Gonzalez,D. Bejarano, L. Cabanilla,F.Lopez, A. Velez,R.Valencia, R.Ashley, S.Torres,J. Hinojosa, K. Collins, D.Stanko, J. Monterey

effects of quasi judicial
Effects of Quasi-judicial
  • There is some risk that WTO rulings will override national legislation in areas of health, safety, environment, and other regulatory policies.
  • The commission believes that quasi-judicial decisions of international organizations should not supplement legislative decisions.

S. Hernandez, E. Gonzalez,D. Bejarano, L. Cabanilla,F.Lopez, A. Velez,R.Valencia, R.Ashley, S.Torres,J. Hinojosa, K. Collins, D.Stanko, J. Monterey

more recommendations
More recommendations
  • Rulings or decisions by the WTO under treaties or international agreements must remain subject to explicit legislative enactment by the US Congress or by the national legislative authority.

S. Hernandez, E. Gonzalez,D. Bejarano, L. Cabanilla,F.Lopez, A. Velez,R.Valencia, R.Ashley, S.Torres,J. Hinojosa, K. Collins, D.Stanko, J. Monterey

slide45
This would limit the WTO’s authority to impose sanctions on a country for violation of rules.

Benefits: strengthens democratic accountability and precludes delegation and erosion the legislative function.

Instead of retaliation, countries guilty of illegal trade practices should pay an annual fine equal to the value of the damages assessed by the panel or provide equivalent trade liberalization.

………

S. Hernandez, E. Gonzalez,D. Bejarano, L. Cabanilla,F.Lopez, A. Velez,R.Valencia, R.Ashley, S.Torres,J. Hinojosa, K. Collins, D.Stanko, J. Monterey

rules for financial stability
Commission recommends rules to enhance financial stability.

Such rules can reduce risk, spread best managerial practices, increase competition, and reduce the role of gov’t in the allocation of bank loans.

Commission also recommends that explicit min. financial standards be phased in as a condition for assistance from the IMF in a financial crisis.

Enforcement of the preconditions should remain the IMF’s responsibility.

Rules for financial stability

S. Hernandez, E. Gonzalez,D. Bejarano, L. Cabanilla,F.Lopez, A. Velez,R.Valencia, R.Ashley, S.Torres,J. Hinojosa, K. Collins, D.Stanko, J. Monterey

in the end
In the end...
  • Proposals and recommendations should be the responsibility of the groups on banking and financial standards.

S. Hernandez, E. Gonzalez,D. Bejarano, L. Cabanilla,F.Lopez, A. Velez,R.Valencia, R.Ashley, S.Torres,J. Hinojosa, K. Collins, D.Stanko, J. Monterey

conclusion
The WTO has proved effective in settling disputes about tariffs and trade restrictions.

It should not extend its procedures to set domestic policies and regulations, including regulation of banking services, accounting practices, or financial standards.

These should remain the responsibility of specialized agencies.

Conclusion

S. Hernandez, E. Gonzalez,D. Bejarano, L. Cabanilla,F.Lopez, A. Velez,R.Valencia, R.Ashley, S.Torres,J. Hinojosa, K. Collins, D.Stanko, J. Monterey

international monetary fund

International Monetary Fund

By: Dianna Bejarano

S. Hernandez, E. Gonzalez,D. Bejarano, L. Cabanilla,F.Lopez, A. Velez,R.Valencia, R.Ashley, S.Torres,J. Hinojosa, K. Collins, D.Stanko, J. Monterey

beginnings
Beginnings:
  • Established at the Bretton Woods Conference after WWII to prevent a reoccurrence of monetary & financial instability.
  • The founders expected the IMF to “make short-term loans to assist countries with payment deficits and to advise countries that failed to remove controls on currents accounts.”

S. Hernandez, E. Gonzalez,D. Bejarano, L. Cabanilla,F.Lopez, A. Velez,R.Valencia, R.Ashley, S.Torres,J. Hinojosa, K. Collins, D.Stanko, J. Monterey

some problems
Some Problems:
  • IMF assistance postponed debt reduction.
  • IMF assistance delayed renegotiation of the debt & the resumption of capital inflows, investment and economic recovery.
  • IMF control often undermined the sovereignty and democratic processes of member govt’s.
  • IMF is deficient in providing liquidity during crises.

S. Hernandez, E. Gonzalez,D. Bejarano, L. Cabanilla,F.Lopez, A. Velez,R.Valencia, R.Ashley, S.Torres,J. Hinojosa, K. Collins, D.Stanko, J. Monterey

the mission of the new imf
The Mission of the New IMF:
  • The commission recommends that the IMF……

‣act as a quasi-lender of last resort to solvent emerging economies by providing short-term liquidity.

--IMF loans should have a short maturity (max 120 days)

--IMF loans should have a penalty rate

--IMF would be considered a “stand-by lender”

--in a crisis, the Fund should borrow convertible currencies

as needed to finance short-term liquidity loans.

S. Hernandez, E. Gonzalez,D. Bejarano, L. Cabanilla,F.Lopez, A. Velez,R.Valencia, R.Ashley, S.Torres,J. Hinojosa, K. Collins, D.Stanko, J. Monterey

continued
(Continued)

‣ collect and publish financial & economic data from

member countries, and disseminate those data in a timely & uniform manner.

‣ provide advice (but not impose conditions)

relating to economic policy.

‣should uphold that if member countries default on their loan debs that they would not be eligible for help from other multilateral agencies or other member countries.

S. Hernandez, E. Gonzalez,D. Bejarano, L. Cabanilla,F.Lopez, A. Velez,R.Valencia, R.Ashley, S.Torres,J. Hinojosa, K. Collins, D.Stanko, J. Monterey

reform of imf world bank54
REFORM OF IMF, WORLD BANK
  • MELTZER REPORT
    • PRO AND CON IN THE PRESS

S. Hernandez, E. Gonzalez,D. Bejarano, L. Cabanilla,F.Lopez, A. Velez,R.Valencia, R.Ashley, S.Torres,J. Hinojosa, K. Collins, D.Stanko, J. Monterey

world opinion on meltzer commission

World Opinion on Meltzer Commission

Fernando Lopez

“chema” Monterey

S. Hernandez, E. Gonzalez,D. Bejarano, L. Cabanilla,F.Lopez, A. Velez,R.Valencia, R.Ashley, S.Torres,J. Hinojosa, K. Collins, D.Stanko, J. Monterey

treasury reply to imf world bank reform commission report
Treasury Reply to IMF/World Bank Reform Commission Report
  • The U.S. Department of the Treasury has rejected core recommendations of the Congressional-appointed International Financial Institution Advisory Commission report, saying they would so weaken the International Monetary Fund (IMF) and the multilateral development banks that these institutions could no longer serve vital U.S. interests.

S. Hernandez, E. Gonzalez,D. Bejarano, L. Cabanilla,F.Lopez, A. Velez,R.Valencia, R.Ashley, S.Torres,J. Hinojosa, K. Collins, D.Stanko, J. Monterey

financial daily from the hindu group of publications on indiaserver com monday march 27 2000
Financial Dailyfrom THE HINDU group of publications on indiaserver.comMonday, March 27, 2000
  • Now, the Meltzer Commission has recommended a drastic change in the scope and size of operations of the Bretton Wood twins. These recommendations show sensitivity to policy failures of the IMF/IBRD, both in the South-East Asian crisis and in Russia. Perhaps, these changes, suggested by the Meltzer group, are inevitable. Many other experts also believed that the IMF was becoming too powerful for its own good. The suggested changes would, however, reduce the IMF's role to essentially a vendor of short-term loans. No longer can it try to cross over to a larger-than-life vision of taking part in the long-term development of the world.

S. Hernandez, E. Gonzalez,D. Bejarano, L. Cabanilla,F.Lopez, A. Velez,R.Valencia, R.Ashley, S.Torres,J. Hinojosa, K. Collins, D.Stanko, J. Monterey

the meltzer report j bradford delong may 2000
The Meltzer ReportJ. Bradford DeLongMay 2000
  • Last March the Meltzer Commission--established by the U.S. Congress as part and parcel of the legislation adding $18 billion to the U.S.'s capital contribution to the IMF--issued its Report. The press registered that the Commission had called for thorough-going reforms of the World Bank and IMF. But it quickly dropped from sight: the Report was more than 100 pages long. Much of it was written in economese, that peculiar language that only academic economists speak with fluency.

S. Hernandez, E. Gonzalez,D. Bejarano, L. Cabanilla,F.Lopez, A. Velez,R.Valencia, R.Ashley, S.Torres,J. Hinojosa, K. Collins, D.Stanko, J. Monterey

reshaping imf and world bank meltzer commission report april 8 14 2000
Reshaping IMF and World BankMeltzer Commission ReportApril 8-14, 2000
  • The report has a broad remit, extending, besides the IMF and the World Bank to the regional development banks, the Bank for International Settlements (BIS) and the World Trade Organization. But the last two are peripheral to the main thrust of the report. The focus of the report is on the IMF and the World Bank. The commission has tried to reassess their role in the new economic environment which has changed the conditions governing their functioning.

S. Hernandez, E. Gonzalez,D. Bejarano, L. Cabanilla,F.Lopez, A. Velez,R.Valencia, R.Ashley, S.Torres,J. Hinojosa, K. Collins, D.Stanko, J. Monterey

the meltzer commission and the g 7
The Meltzer Commission And the G-7
  • The commission’s reforms will no doubt challenge vested interests, whether they be the internal bureaucracies of the institutions which would lose their empires or the ruling elites in the developing countries which in the past have acquired squatters’ rights on the funds of the IMF and the World Bank or the industrial countries which influence these international institutions, particularly the IMF, to provide ‘slush funds’ to support the decisions of the G-7 finance ministers or other groups of powerful members.

S. Hernandez, E. Gonzalez,D. Bejarano, L. Cabanilla,F.Lopez, A. Velez,R.Valencia, R.Ashley, S.Torres,J. Hinojosa, K. Collins, D.Stanko, J. Monterey

slide61
MELTZER REPORT MISSES THE MARKCommission’s recommendations for World Bank, IMF need further consideration
  • Three issues in the commission’s report – debt forgiveness, capital controls, and development policies – warrant further consideration. The first of these involves debt forgiveness. The commission agrees that debt forgiveness for highly indebted poor countries (HIPCs) should be one of the first steps in reforming the global financial system

S. Hernandez, E. Gonzalez,D. Bejarano, L. Cabanilla,F.Lopez, A. Velez,R.Valencia, R.Ashley, S.Torres,J. Hinojosa, K. Collins, D.Stanko, J. Monterey

slide62
MELTZER REPORT MISSES THE MARKCommission’s recommendations for World Bank, IMF need further consideration
  • As for the second issue – capital controls – the commission does not seem to recognize these as useful public policy tools, but its recommendations, when examined closely, are contradictory. The final issue involves the parameters of the development debate, which the commission defines too narrowly. The commission encourages fiscal and monetary restraint and financial deregulation – which have been shown to be harmful to working people – and continues to ignore the growing criticism of increased labor market flexibility

S. Hernandez, E. Gonzalez,D. Bejarano, L. Cabanilla,F.Lopez, A. Velez,R.Valencia, R.Ashley, S.Torres,J. Hinojosa, K. Collins, D.Stanko, J. Monterey

slide63
MELTZER REPORT MISSES THE MARKCommission’s recommendations for World Bank, IMF need further consideration
  • Redesigning the international financial institutionsThe IMF and World Bank have been criticized for their mishandling of financial crises and the ineffective design and implementation of development projects, providing an impetus to reform these and other international financial institutions (IFIs). Fortunately, the issue is no longer whether, but how these institutions should be reformed.

S. Hernandez, E. Gonzalez,D. Bejarano, L. Cabanilla,F.Lopez, A. Velez,R.Valencia, R.Ashley, S.Torres,J. Hinojosa, K. Collins, D.Stanko, J. Monterey

slide64

Congressionally-appointed Panel Acknowledges Failures of IMF and World Bank to Help the World's Poor, But Lack of Accountability Remains Unanswered

  • WASHINGTON, DC, March 7, 2000 - A coalition of development and environmental advocates today said a new report by a Congressionally appointed commission is a welcome acknowledgement that the International Monetary Fund (IMF) and World Bank Group are largely failing in their mission to address world poverty and economic stability, and need major overhaul. However, the groups say that while the report contains some laudable recommendations, it fails to address other key fundamental problems

S. Hernandez, E. Gonzalez,D. Bejarano, L. Cabanilla,F.Lopez, A. Velez,R.Valencia, R.Ashley, S.Torres,J. Hinojosa, K. Collins, D.Stanko, J. Monterey

slide65

Congressionally-appointed Panel Acknowledges Failures of IMF and World Bank to Help the World's Poor, But Lack of Accountability Remains Unanswered

  • According to the report, written by a panel of economists headed by Allan Meltzer, the failures of the World Bank Group and IMF can be traced to "overlapping missions," "ineffectiveness, corruption, and waste of resources," and failure to develop successful regional programs in agriculture, forestry, environment, health care, and other sectors - among other problems. But while the Commission also said "lack of transparency and accountability" contributed to this failure, it did not offer any reforms to address this problem.

S. Hernandez, E. Gonzalez,D. Bejarano, L. Cabanilla,F.Lopez, A. Velez,R.Valencia, R.Ashley, S.Torres,J. Hinojosa, K. Collins, D.Stanko, J. Monterey

meltzer report wants wto powers reined in
Meltzer report wants WTO powers reined in
  • The only unanimous recommendations of the Meltzer Commission are those that: (1) the IMF, the World Bank and the regional development banks write off in their entirety all claims against the heavily indebted poor countries (HIPCs), and (2) the IMF should restrict its lending to the provision of short-term liquidity and end its current practice of extending long-term loans for poverty reduction and other purposes

S. Hernandez, E. Gonzalez,D. Bejarano, L. Cabanilla,F.Lopez, A. Velez,R.Valencia, R.Ashley, S.Torres,J. Hinojosa, K. Collins, D.Stanko, J. Monterey

limiting the scope of the world bank by james d wolfensohn
Limiting the Scope of the World Bankby James D. Wolfensohn
  • We are, of course, pleased that the issue of poverty reduction should be headline news. We share the commission’s concern that more must be done by all the players in the fight against poverty, and we applaud all who broach this difficult subject. We also welcome the commission’s call for debt relief, and we hope that funding support from Congress will follow it. This is crucial.
  • We nevertheless believe that a number of the commission’s proposals are based on a fundamental misreading of the development challenges we face today. Poor people in developing countries will be the losers if these proposals are implemented. If the World Bank were to withdraw entirely from Asia and from Latin America; if it were to stop lending to countries with a per capita income above $4,000 a year, it would cut out the marginalized, the poorest, the excluded who live in these countries.

S. Hernandez, E. Gonzalez,D. Bejarano, L. Cabanilla,F.Lopez, A. Velez,R.Valencia, R.Ashley, S.Torres,J. Hinojosa, K. Collins, D.Stanko, J. Monterey

commission report has imf wb shaking march 6 2000
Commission report has IMF, WB shakingMarch 6, 2000
  • US COMMISSION REPORT ON IMF, WORLD BANK REFORMS DUE SHORTLY. As if the IMF needed some more bad news, it is about to be told by a new report that it should engage in some serious downsizing, says the FT's "Observer" column (p.17). The thoughts of the report's chief authors are poised to come out on Wednesday, when a US congressional commission on international financial institutions makes its own views known. Among other big changes it is likely to recommend, it wants to make the IMF just a provider of emergency finance and turn the World Bank into a provider of grants, not loans.

S. Hernandez, E. Gonzalez,D. Bejarano, L. Cabanilla,F.Lopez, A. Velez,R.Valencia, R.Ashley, S.Torres,J. Hinojosa, K. Collins, D.Stanko, J. Monterey

world opinion on meltzer commission69

World Opinion on Meltzer Commission

Fernando Lopez

chema Monterey

S. Hernandez, E. Gonzalez,D. Bejarano, L. Cabanilla,F.Lopez, A. Velez,R.Valencia, R.Ashley, S.Torres,J. Hinojosa, K. Collins, D.Stanko, J. Monterey

treasury reply to imf world bank reform commission report70
Treasury Reply to IMF/World Bank Reform Commission Report
  • The U.S. Department of the Treasury has rejected core recommendations of the Congressional-appointed International Financial Institution Advisory Commission report, saying they would so weaken the International Monetary Fund (IMF) and the multilateral development banks that these institutions could no longer serve vital U.S. interests.

S. Hernandez, E. Gonzalez,D. Bejarano, L. Cabanilla,F.Lopez, A. Velez,R.Valencia, R.Ashley, S.Torres,J. Hinojosa, K. Collins, D.Stanko, J. Monterey

financial daily from the hindu group of publications on indiaserver com monday march 27 200071
Financial Dailyfrom THE HINDU group of publications on indiaserver.comMonday, March 27, 2000
  • Now, the Meltzer Commission has recommended a drastic change in the scope and size of operations of the Bretton Woods twins. These recommendations show sensitivity to policy failures of the IMF/IBRD, both in the South-East Asian crisis and in Russia. Perhaps, these changes, suggested by the Meltzer group, are inevitable. Many other experts also believed that the IMF was becoming too powerful for its own good. The suggested changes would, however, reduce the IMF's role to essentially a vendor of short-term loans. No longer can it try to cross over to a larger-than-life vision of taking part in the long-term development of the world.

S. Hernandez, E. Gonzalez,D. Bejarano, L. Cabanilla,F.Lopez, A. Velez,R.Valencia, R.Ashley, S.Torres,J. Hinojosa, K. Collins, D.Stanko, J. Monterey

the meltzer report j bradford delong may 200072
The Meltzer ReportJ. Bradford DeLongMay 2000
  • Last March the Meltzer Commission--established by the U.S. Congress as part and parcel of the legislation adding $18 billion to the U.S.'s capital contribution to the IMF--issued its Report. The press registered that the Commission had called for thorough-going reforms of the World Bank and IMF. But it quickly dropped from sight: the Report was more than 100 pages long. Much of it was written in economese, that peculiar language that only academic economists speak with fluency.

S. Hernandez, E. Gonzalez,D. Bejarano, L. Cabanilla,F.Lopez, A. Velez,R.Valencia, R.Ashley, S.Torres,J. Hinojosa, K. Collins, D.Stanko, J. Monterey

reshaping imf and world bank meltzer commission report april 8 14 200073
Reshaping IMF and World BankMeltzer Commission ReportApril 8-14, 2000
  • The report has a broad remit, extending, besides the IMF and the World Bank to the regional development banks, the Bank for International Settlements (BIS) and the World Trade Organization. But the last two are peripheral to the main thrust of the report. The focus of the report is on the IMF and the World Bank. The commission has tried to reassess their role in the new economic environment which has changed the conditions governing their functioning.

S. Hernandez, E. Gonzalez,D. Bejarano, L. Cabanilla,F.Lopez, A. Velez,R.Valencia, R.Ashley, S.Torres,J. Hinojosa, K. Collins, D.Stanko, J. Monterey

the meltzer commission and the g 774
The Meltzer Commission And the G-7
  • The commission’s reforms will no doubt challenge vested interests, whether they be the internal bureaucracies of the institutions which would lose their empires or the ruling elites in the developing countries which in the past have acquired squatters’ rights on the funds of the IMF and the World Bank or the industrial countries which influence these international institutions, particularly the IMF, to provide ‘slush funds’ to support the decisions of the G-7 finance ministers or other groups of powerful members.

S. Hernandez, E. Gonzalez,D. Bejarano, L. Cabanilla,F.Lopez, A. Velez,R.Valencia, R.Ashley, S.Torres,J. Hinojosa, K. Collins, D.Stanko, J. Monterey

slide75
MELTZER REPORT MISSES THE MARKCommission’s recommendations for World Bank, IMF need further consideration
  • Three issues in the commission’s report – debt forgiveness, capital controls, and development policies – warrant further consideration. The first of these involves debt forgiveness. The commission agrees that debt forgiveness for highly indebted poor countries (HIPCs) should be one of the first steps in reforming the global financial system

S. Hernandez, E. Gonzalez,D. Bejarano, L. Cabanilla,F.Lopez, A. Velez,R.Valencia, R.Ashley, S.Torres,J. Hinojosa, K. Collins, D.Stanko, J. Monterey

slide76
MELTZER REPORT MISSES THE MARKCommission’s recommendations for World Bank, IMF need further consideration
  • As for the second issue – capital controls – the commission does not seem to recognize these as useful public policy tools, but its recommendations, when examined closely, are contradictory. The final issue involves the parameters of the development debate, which the commission defines too narrowly. The commission encourages fiscal and monetary restraint and financial deregulation – which have been shown to be harmful to working people – and continues to ignore the growing criticism of increased labor market flexibility

S. Hernandez, E. Gonzalez,D. Bejarano, L. Cabanilla,F.Lopez, A. Velez,R.Valencia, R.Ashley, S.Torres,J. Hinojosa, K. Collins, D.Stanko, J. Monterey

slide77
MELTZER REPORT MISSES THE MARKCommission’s recommendations for World Bank, IMF need further consideration
  • Redesigning the international financial institutionsThe IMF and World Bank have been criticized for their mishandling of financial crises and the ineffective design and implementation of development projects, providing an impetus to reform these and other international financial institutions (IFIs). Fortunately, the issue is no longer whether, but how these institutions should be reformed.

S. Hernandez, E. Gonzalez,D. Bejarano, L. Cabanilla,F.Lopez, A. Velez,R.Valencia, R.Ashley, S.Torres,J. Hinojosa, K. Collins, D.Stanko, J. Monterey

slide78

Congressionally-appointed Panel Acknowledges Failures of IMF and World Bank to Help the World's Poor, But Lack of Accountability Remains Unanswered

  • WASHINGTON, DC, March 7, 2000 - A coalition of development and environmental advocates today said a new report by a Congressionally appointed commission is a welcome acknowledgement that the International Monetary Fund (IMF) and World Bank Group are largely failing in their mission to address world poverty and economic stability, and need major overhaul. However, the groups say that while the report contains some laudable recommendations, it fails to address other key fundamental problems

S. Hernandez, E. Gonzalez,D. Bejarano, L. Cabanilla,F.Lopez, A. Velez,R.Valencia, R.Ashley, S.Torres,J. Hinojosa, K. Collins, D.Stanko, J. Monterey

slide79

Congressionally-appointed Panel Acknowledges Failures of IMF and World Bank to Help the World's Poor, But Lack of Accountability Remains Unanswered

  • According to the report, written by a panel of economists headed by Allan Meltzer, the failures of the World Bank Group and IMF can be traced to "overlapping missions," "ineffectiveness, corruption, and waste of resources," and failure to develop successful regional programs in agriculture, forestry, environment, health care, and other sectors - among other problems. But while the Commission also said "lack of transparency and accountability" contributed to this failure, it did not offer any reforms to address this problem.

S. Hernandez, E. Gonzalez,D. Bejarano, L. Cabanilla,F.Lopez, A. Velez,R.Valencia, R.Ashley, S.Torres,J. Hinojosa, K. Collins, D.Stanko, J. Monterey

meltzer report wants wto powers reined in80
Meltzer report wants WTO powers reined in
  • The only unanimous recommendations of the Meltzer Commission are those that: (1) the IMF, the World Bank and the regional development banks write off in their entirety all claims against the heavily indebted poor countries (HIPCs), and (2) the IMF should restrict its lending to the provision of short-term liquidity and end its current practice of extending long-term loans for poverty reduction and other purposes

S. Hernandez, E. Gonzalez,D. Bejarano, L. Cabanilla,F.Lopez, A. Velez,R.Valencia, R.Ashley, S.Torres,J. Hinojosa, K. Collins, D.Stanko, J. Monterey

limiting the scope of the world bank by james d wolfensohn81
Limiting the Scope of the World Bankby James D. Wolfensohn
  • We are, of course, pleased that the issue of poverty reduction should be headline news. We share the commission’s concern that more must be done by all the players in the fight against poverty, and we applaud all who broach this difficult subject. We also welcome the commission’s call for debt relief, and we hope that funding support from Congress will follow it. This is crucial.
  • We nevertheless believe that a number of the commission’s proposals are based on a fundamental misreading of the development challenges we face today. Poor people in developing countries will be the losers if these proposals are implemented. If the World Bank were to withdraw entirely from Asia and from Latin America; if it were to stop lending to countries with a per capita income above $4,000 a year, it would cut out the marginalized, the poorest, the excluded who live in these countries.

S. Hernandez, E. Gonzalez,D. Bejarano, L. Cabanilla,F.Lopez, A. Velez,R.Valencia, R.Ashley, S.Torres,J. Hinojosa, K. Collins, D.Stanko, J. Monterey

commission report has imf wb shaking march 6 200082
Commission report has IMF, WB shakingMarch 6, 2000
  • US COMMISSION REPORT ON IMF, WORLD BANK REFORMS DUE SHORTLY. As if the IMF needed some more bad news, it is about to be told by a new report that it should engage in some serious downsizing, says the FT's "Observer" column (p.17). The thoughts of the report's chief authors are poised to come out on Wednesday, when a US congressional commission on international financial institutions makes its own views known. Among other big changes it is likely to recommend, it wants to make the IMF just a provider of emergency finance and turn the World Bank into a provider of grants, not loans.

S. Hernandez, E. Gonzalez,D. Bejarano, L. Cabanilla,F.Lopez, A. Velez,R.Valencia, R.Ashley, S.Torres,J. Hinojosa, K. Collins, D.Stanko, J. Monterey

world opinion on meltzer commission83

World Opinion on Meltzer Commission

Fernando Lopez

chema Monterey

S. Hernandez, E. Gonzalez,D. Bejarano, L. Cabanilla,F.Lopez, A. Velez,R.Valencia, R.Ashley, S.Torres,J. Hinojosa, K. Collins, D.Stanko, J. Monterey

treasury reply to imf world bank reform commission report84
Treasury Reply to IMF/World Bank Reform Commission Report
  • The U.S. Department of the Treasury has rejected core recommendations of the Congressional-appointed International Financial Institution Advisory Commission report, saying they would so weaken the International Monetary Fund (IMF) and the multilateral development banks that these institutions could no longer serve vital U.S. interests.

S. Hernandez, E. Gonzalez,D. Bejarano, L. Cabanilla,F.Lopez, A. Velez,R.Valencia, R.Ashley, S.Torres,J. Hinojosa, K. Collins, D.Stanko, J. Monterey

financial daily from the hindu group of publications on indiaserver com monday march 27 200085
Financial Dailyfrom THE HINDU group of publications on indiaserver.comMonday, March 27, 2000
  • Now, the Meltzer Commission has recommended a drastic change in the scope and size of operations of the Bretton Woods twins. These recommendations show sensitivity to policy failures of the IMF/IBRD, both in the South-East Asian crisis and in Russia. Perhaps, these changes, suggested by the Meltzer group, are inevitable. Many other experts also believed that the IMF was becoming too powerful for its own good. The suggested changes would, however, reduce the IMF's role to essentially a vendor of short-term loans. No longer can it try to cross over to a larger-than-life vision of taking part in the long-term development of the world.

S. Hernandez, E. Gonzalez,D. Bejarano, L. Cabanilla,F.Lopez, A. Velez,R.Valencia, R.Ashley, S.Torres,J. Hinojosa, K. Collins, D.Stanko, J. Monterey

the meltzer report j bradford delong may 200086
The Meltzer ReportJ. Bradford DeLongMay 2000
  • Last March the Meltzer Commission--established by the U.S. Congress as part and parcel of the legislation adding $18 billion to the U.S.'s capital contribution to the IMF--issued its Report. The press registered that the Commission had called for thorough-going reforms of the World Bank and IMF. But it quickly dropped from sight: the Report was more than 100 pages long. Much of it was written in economese, that peculiar language that only academic economists speak with fluency.

S. Hernandez, E. Gonzalez,D. Bejarano, L. Cabanilla,F.Lopez, A. Velez,R.Valencia, R.Ashley, S.Torres,J. Hinojosa, K. Collins, D.Stanko, J. Monterey

reshaping imf and world bank meltzer commission report april 8 14 200087
Reshaping IMF and World BankMeltzer Commission ReportApril 8-14, 2000
  • The report has a broad remit, extending, besides the IMF and the World Bank to the regional development banks, the Bank for International Settlements (BIS) and the World Trade Organization. But the last two are peripheral to the main thrust of the report. The focus of the report is on the IMF and the World Bank. The commission has tried to reassess their role in the new economic environment which has changed the conditions governing their functioning.

S. Hernandez, E. Gonzalez,D. Bejarano, L. Cabanilla,F.Lopez, A. Velez,R.Valencia, R.Ashley, S.Torres,J. Hinojosa, K. Collins, D.Stanko, J. Monterey

the meltzer commission and the g 788
The Meltzer Commission And the G-7
  • The commission’s reforms will no doubt challenge vested interests, whether they be the internal bureaucracies of the institutions which would lose their empires or the ruling elites in the developing countries which in the past have acquired squatters’ rights on the funds of the IMF and the World Bank or the industrial countries which influence these international institutions, particularly the IMF, to provide ‘slush funds’ to support the decisions of the G-7 finance ministers or other groups of powerful members.

S. Hernandez, E. Gonzalez,D. Bejarano, L. Cabanilla,F.Lopez, A. Velez,R.Valencia, R.Ashley, S.Torres,J. Hinojosa, K. Collins, D.Stanko, J. Monterey

slide89
MELTZER REPORT MISSES THE MARKCommission’s recommendations for World Bank, IMF need further consideration
  • Three issues in the commission’s report – debt forgiveness, capital controls, and development policies – warrant further consideration. The first of these involves debt forgiveness. The commission agrees that debt forgiveness for highly indebted poor countries (HIPCs) should be one of the first steps in reforming the global financial system

S. Hernandez, E. Gonzalez,D. Bejarano, L. Cabanilla,F.Lopez, A. Velez,R.Valencia, R.Ashley, S.Torres,J. Hinojosa, K. Collins, D.Stanko, J. Monterey

slide90
MELTZER REPORT MISSES THE MARKCommission’s recommendations for World Bank, IMF need further consideration
  • As for the second issue – capital controls – the commission does not seem to recognize these as useful public policy tools, but its recommendations, when examined closely, are contradictory. The final issue involves the parameters of the development debate, which the commission defines too narrowly. The commission encourages fiscal and monetary restraint and financial deregulation – which have been shown to be harmful to working people – and continues to ignore the growing criticism of increased labor market flexibility

S. Hernandez, E. Gonzalez,D. Bejarano, L. Cabanilla,F.Lopez, A. Velez,R.Valencia, R.Ashley, S.Torres,J. Hinojosa, K. Collins, D.Stanko, J. Monterey

slide91
MELTZER REPORT MISSES THE MARKCommission’s recommendations for World Bank, IMF need further consideration
  • Redesigning the international financial institutionsThe IMF and World Bank have been criticized for their mishandling of financial crises and the ineffective design and implementation of development projects, providing an impetus to reform these and other international financial institutions (IFIs). Fortunately, the issue is no longer whether, but how these institutions should be reformed.

S. Hernandez, E. Gonzalez,D. Bejarano, L. Cabanilla,F.Lopez, A. Velez,R.Valencia, R.Ashley, S.Torres,J. Hinojosa, K. Collins, D.Stanko, J. Monterey

slide92

Congressionally-appointed Panel Acknowledges Failures of IMF and World Bank to Help the World's Poor, But Lack of Accountability Remains Unanswered

  • WASHINGTON, DC, March 7, 2000 - A coalition of development and environmental advocates today said a new report by a Congressionally appointed commission is a welcome acknowledgement that the International Monetary Fund (IMF) and World Bank Group are largely failing in their mission to address world poverty and economic stability, and need major overhaul. However, the groups say that while the report contains some laudable recommendations, it fails to address other key fundamental problems

S. Hernandez, E. Gonzalez,D. Bejarano, L. Cabanilla,F.Lopez, A. Velez,R.Valencia, R.Ashley, S.Torres,J. Hinojosa, K. Collins, D.Stanko, J. Monterey

slide93

Congressionally-appointed Panel Acknowledges Failures of IMF and World Bank to Help the World's Poor, But Lack of Accountability Remains Unanswered

  • According to the report, written by a panel of economists headed by Allan Meltzer, the failures of the World Bank Group and IMF can be traced to "overlapping missions," "ineffectiveness, corruption, and waste of resources," and failure to develop successful regional programs in agriculture, forestry, environment, health care, and other sectors - among other problems. But while the Commission also said "lack of transparency and accountability" contributed to this failure, it did not offer any reforms to address this problem.

S. Hernandez, E. Gonzalez,D. Bejarano, L. Cabanilla,F.Lopez, A. Velez,R.Valencia, R.Ashley, S.Torres,J. Hinojosa, K. Collins, D.Stanko, J. Monterey

meltzer report wants wto powers reined in94
Meltzer report wants WTO powers reined in
  • The only unanimous recommendations of the Meltzer Commission are those that: (1) the IMF, the World Bank and the regional development banks write off in their entirety all claims against the heavily indebted poor countries (HIPCs), and (2) the IMF should restrict its lending to the provision of short-term liquidity and end its current practice of extending long-term loans for poverty reduction and other purposes

S. Hernandez, E. Gonzalez,D. Bejarano, L. Cabanilla,F.Lopez, A. Velez,R.Valencia, R.Ashley, S.Torres,J. Hinojosa, K. Collins, D.Stanko, J. Monterey

limiting the scope of the world bank by james d wolfensohn95
Limiting the Scope of the World Bankby James D. Wolfensohn
  • We are, of course, pleased that the issue of poverty reduction should be headline news. We share the commission’s concern that more must be done by all the players in the fight against poverty, and we applaud all who broach this difficult subject. We also welcome the commission’s call for debt relief, and we hope that funding support from Congress will follow it. This is crucial.
  • We nevertheless believe that a number of the commission’s proposals are based on a fundamental misreading of the development challenges we face today. Poor people in developing countries will be the losers if these proposals are implemented. If the World Bank were to withdraw entirely from Asia and from Latin America; if it were to stop lending to countries with a per capita income above $4,000 a year, it would cut out the marginalized, the poorest, the excluded who live in these countries.

S. Hernandez, E. Gonzalez,D. Bejarano, L. Cabanilla,F.Lopez, A. Velez,R.Valencia, R.Ashley, S.Torres,J. Hinojosa, K. Collins, D.Stanko, J. Monterey

commission report has imf wb shaking march 6 200096
Commission report has IMF, WB shakingMarch 6, 2000
  • US COMMISSION REPORT ON IMF, WORLD BANK REFORMS DUE SHORTLY. As if the IMF needed some more bad news, it is about to be told by a new report that it should engage in some serious downsizing, says the FT's "Observer" column (p.17). The thoughts of the report's chief authors are poised to come out on Wednesday, when a US congressional commission on international financial institutions makes its own views known. Among other big changes it is likely to recommend, it wants to make the IMF just a provider of emergency finance and turn the World Bank into a provider of grants, not loans.

S. Hernandez, E. Gonzalez,D. Bejarano, L. Cabanilla,F.Lopez, A. Velez,R.Valencia, R.Ashley, S.Torres,J. Hinojosa, K. Collins, D.Stanko, J. Monterey

meltzer report pros and cons

Meltzer ReportPros and Cons

Dennis Stanko

Keely Collins

S. Hernandez, E. Gonzalez,D. Bejarano, L. Cabanilla,F.Lopez, A. Velez,R.Valencia, R.Ashley, S.Torres,J. Hinojosa, K. Collins, D.Stanko, J. Monterey

slide98
Pros
  • Report recognizes the pitfalls of the current IMF system- cause of social and environmental damage, IMF and World Bank’s inability to address world poverty and economic stability
  • Finds correctly that the World Bank should restrict financial support to sectors that have a direct and demonstrable connection to poverty alleviation and sustainable development.
  • Makes valid recommendations:
    • IMF should restrict lending to the provision of short-term liquidity countries in financial difficulties.
    • Loans should only be made to countries that have met preconditions for financial soundness.
    • World Bank should focus efforts on low-income countries that lack access to capital markets.

S. Hernandez, E. Gonzalez,D. Bejarano, L. Cabanilla,F.Lopez, A. Velez,R.Valencia, R.Ashley, S.Torres,J. Hinojosa, K. Collins, D.Stanko, J. Monterey

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Cons
  • Doesn’t address the need to develop accountability and democracy in the IMF.
  • Doesn’t address changes in society- move from fixed exchange, absence of cold-war concerns.
  • Doesn’t specifically address how to aid the countries that don’t qualify/
  • Fails to address greater need for attention to the environmental and social implications through assessments.
    • For example- it overlooks a number of important sectors that can help fulfill this mandate to benefit the social and environmental aspects such as investments in renewable energy, education, and improved urban living.

S. Hernandez, E. Gonzalez,D. Bejarano, L. Cabanilla,F.Lopez, A. Velez,R.Valencia, R.Ashley, S.Torres,J. Hinojosa, K. Collins, D.Stanko, J. Monterey

sources
Sources

www.igc.org/trac/headlines/2000

Press Release- Friends of the Earth/Center of Concern. “USA: Congressional Panel Says IMF, World Bank Fail to Help Poor.” March 7, 2000

Wolf, Martin. “USA: Between Revolution and Reform-The Meltzer Commission’s Vision.” Financial Times. March 8, 2000.

S. Hernandez, E. Gonzalez,D. Bejarano, L. Cabanilla,F.Lopez, A. Velez,R.Valencia, R.Ashley, S.Torres,J. Hinojosa, K. Collins, D.Stanko, J. Monterey

us commercial policy101
US COMMERCIAL POLICY
  • SOME KEY IDEAS
  • CONCLUSIONS
  • THESE COULD BE VERY INTERESTING TIMES AHEAD!

S. Hernandez, E. Gonzalez,D. Bejarano, L. Cabanilla,F.Lopez, A. Velez,R.Valencia, R.Ashley, S.Torres,J. Hinojosa, K. Collins, D.Stanko, J. Monterey

world opinion on meltzer commission102

World Opinion on Meltzer Commission

Fernando Lopez

chema Monterey

S. Hernandez, E. Gonzalez,D. Bejarano, L. Cabanilla,F.Lopez, A. Velez,R.Valencia, R.Ashley, S.Torres,J. Hinojosa, K. Collins, D.Stanko, J. Monterey

treasury reply to imf world bank reform commission report103
Treasury Reply to IMF/World Bank Reform Commission Report
  • The U.S. Department of the Treasury has rejected core recommendations of the Congressional-appointed International Financial Institution Advisory Commission report, saying they would so weaken the International Monetary Fund (IMF) and the multilateral development banks that these institutions could no longer serve vital U.S. interests.

S. Hernandez, E. Gonzalez,D. Bejarano, L. Cabanilla,F.Lopez, A. Velez,R.Valencia, R.Ashley, S.Torres,J. Hinojosa, K. Collins, D.Stanko, J. Monterey

financial daily from the hindu group of publications on indiaserver com monday march 27 2000104
Financial Dailyfrom THE HINDU group of publications on indiaserver.comMonday, March 27, 2000
  • Now, the Meltzer Commission has recommended a drastic change in the scope and size of operations of the Bretton Woods twins. These recommendations show sensitivity to policy failures of the IMF/IBRD, both in the South-East Asian crisis and in Russia. Perhaps, these changes, suggested by the Meltzer group, are inevitable. Many other experts also believed that the IMF was becoming too powerful for its own good. The suggested changes would, however, reduce the IMF's role to essentially a vendor of short-term loans. No longer can it try to cross over to a larger-than-life vision of taking part in the long-term development of the world.

S. Hernandez, E. Gonzalez,D. Bejarano, L. Cabanilla,F.Lopez, A. Velez,R.Valencia, R.Ashley, S.Torres,J. Hinojosa, K. Collins, D.Stanko, J. Monterey

the meltzer report j bradford delong may 2000105
The Meltzer ReportJ. Bradford DeLongMay 2000
  • Last March the Meltzer Commission--established by the U.S. Congress as part and parcel of the legislation adding $18 billion to the U.S.'s capital contribution to the IMF--issued its Report. The press registered that the Commission had called for thorough-going reforms of the World Bank and IMF. But it quickly dropped from sight: the Report was more than 100 pages long. Much of it was written in economese, that peculiar language that only academic economists speak with fluency.

S. Hernandez, E. Gonzalez,D. Bejarano, L. Cabanilla,F.Lopez, A. Velez,R.Valencia, R.Ashley, S.Torres,J. Hinojosa, K. Collins, D.Stanko, J. Monterey

reshaping imf and world bank meltzer commission report april 8 14 2000106
Reshaping IMF and World BankMeltzer Commission ReportApril 8-14, 2000
  • The report has a broad remit, extending, besides the IMF and the World Bank to the regional development banks, the Bank for International Settlements (BIS) and the World Trade Organization. But the last two are peripheral to the main thrust of the report. The focus of the report is on the IMF and the World Bank. The commission has tried to reassess their role in the new economic environment which has changed the conditions governing their functioning.

S. Hernandez, E. Gonzalez,D. Bejarano, L. Cabanilla,F.Lopez, A. Velez,R.Valencia, R.Ashley, S.Torres,J. Hinojosa, K. Collins, D.Stanko, J. Monterey

the meltzer commission and the g 7107
The Meltzer Commission And the G-7
  • The commission’s reforms will no doubt challenge vested interests, whether they be the internal bureaucracies of the institutions which would lose their empires or the ruling elites in the developing countries which in the past have acquired squatters’ rights on the funds of the IMF and the World Bank or the industrial countries which influence these international institutions, particularly the IMF, to provide ‘slush funds’ to support the decisions of the G-7 finance ministers or other groups of powerful members.

S. Hernandez, E. Gonzalez,D. Bejarano, L. Cabanilla,F.Lopez, A. Velez,R.Valencia, R.Ashley, S.Torres,J. Hinojosa, K. Collins, D.Stanko, J. Monterey

slide108
MELTZER REPORT MISSES THE MARKCommission’s recommendations for World Bank, IMF need further consideration
  • Three issues in the commission’s report – debt forgiveness, capital controls, and development policies – warrant further consideration. The first of these involves debt forgiveness. The commission agrees that debt forgiveness for highly indebted poor countries (HIPCs) should be one of the first steps in reforming the global financial system

S. Hernandez, E. Gonzalez,D. Bejarano, L. Cabanilla,F.Lopez, A. Velez,R.Valencia, R.Ashley, S.Torres,J. Hinojosa, K. Collins, D.Stanko, J. Monterey

slide109
MELTZER REPORT MISSES THE MARKCommission’s recommendations for World Bank, IMF need further consideration
  • As for the second issue – capital controls – the commission does not seem to recognize these as useful public policy tools, but its recommendations, when examined closely, are contradictory. The final issue involves the parameters of the development debate, which the commission defines too narrowly. The commission encourages fiscal and monetary restraint and financial deregulation – which have been shown to be harmful to working people – and continues to ignore the growing criticism of increased labor market flexibility

S. Hernandez, E. Gonzalez,D. Bejarano, L. Cabanilla,F.Lopez, A. Velez,R.Valencia, R.Ashley, S.Torres,J. Hinojosa, K. Collins, D.Stanko, J. Monterey

slide110
MELTZER REPORT MISSES THE MARKCommission’s recommendations for World Bank, IMF need further consideration
  • Redesigning the international financial institutionsThe IMF and World Bank have been criticized for their mishandling of financial crises and the ineffective design and implementation of development projects, providing an impetus to reform these and other international financial institutions (IFIs). Fortunately, the issue is no longer whether, but how these institutions should be reformed.

S. Hernandez, E. Gonzalez,D. Bejarano, L. Cabanilla,F.Lopez, A. Velez,R.Valencia, R.Ashley, S.Torres,J. Hinojosa, K. Collins, D.Stanko, J. Monterey

slide111

Congressionally-appointed Panel Acknowledges Failures of IMF and World Bank to Help the World's Poor, But Lack of Accountability Remains Unanswered

  • WASHINGTON, DC, March 7, 2000 - A coalition of development and environmental advocates today said a new report by a Congressionally appointed commission is a welcome acknowledgement that the International Monetary Fund (IMF) and World Bank Group are largely failing in their mission to address world poverty and economic stability, and need major overhaul. However, the groups say that while the report contains some laudable recommendations, it fails to address other key fundamental problems

S. Hernandez, E. Gonzalez,D. Bejarano, L. Cabanilla,F.Lopez, A. Velez,R.Valencia, R.Ashley, S.Torres,J. Hinojosa, K. Collins, D.Stanko, J. Monterey

slide112

Congressionally-appointed Panel Acknowledges Failures of IMF and World Bank to Help the World's Poor, But Lack of Accountability Remains Unanswered

  • According to the report, written by a panel of economists headed by Allan Meltzer, the failures of the World Bank Group and IMF can be traced to "overlapping missions," "ineffectiveness, corruption, and waste of resources," and failure to develop successful regional programs in agriculture, forestry, environment, health care, and other sectors - among other problems. But while the Commission also said "lack of transparency and accountability" contributed to this failure, it did not offer any reforms to address this problem.

S. Hernandez, E. Gonzalez,D. Bejarano, L. Cabanilla,F.Lopez, A. Velez,R.Valencia, R.Ashley, S.Torres,J. Hinojosa, K. Collins, D.Stanko, J. Monterey

meltzer report wants wto powers reined in113
Meltzer report wants WTO powers reined in
  • The only unanimous recommendations of the Meltzer Commission are those that: (1) the IMF, the World Bank and the regional development banks write off in their entirety all claims against the heavily indebted poor countries (HIPCs), and (2) the IMF should restrict its lending to the provision of short-term liquidity and end its current practice of extending long-term loans for poverty reduction and other purposes

S. Hernandez, E. Gonzalez,D. Bejarano, L. Cabanilla,F.Lopez, A. Velez,R.Valencia, R.Ashley, S.Torres,J. Hinojosa, K. Collins, D.Stanko, J. Monterey

limiting the scope of the world bank by james d wolfensohn114
Limiting the Scope of the World Bankby James D. Wolfensohn
  • We are, of course, pleased that the issue of poverty reduction should be headline news. We share the commission’s concern that more must be done by all the players in the fight against poverty, and we applaud all who broach this difficult subject. We also welcome the commission’s call for debt relief, and we hope that funding support from Congress will follow it. This is crucial.
  • We nevertheless believe that a number of the commission’s proposals are based on a fundamental misreading of the development challenges we face today. Poor people in developing countries will be the losers if these proposals are implemented. If the World Bank were to withdraw entirely from Asia and from Latin America; if it were to stop lending to countries with a per capita income above $4,000 a year, it would cut out the marginalized, the poorest, the excluded who live in these countries.

S. Hernandez, E. Gonzalez,D. Bejarano, L. Cabanilla,F.Lopez, A. Velez,R.Valencia, R.Ashley, S.Torres,J. Hinojosa, K. Collins, D.Stanko, J. Monterey

commission report has imf wb shaking march 6 2000115
Commission report has IMF, WB shakingMarch 6, 2000
  • US COMMISSION REPORT ON IMF, WORLD BANK REFORMS DUE SHORTLY. As if the IMF needed some more bad news, it is about to be told by a new report that it should engage in some serious downsizing, says the FT's "Observer" column (p.17). The thoughts of the report's chief authors are poised to come out on Wednesday, when a US congressional commission on international financial institutions makes its own views known. Among other big changes it is likely to recommend, it wants to make the IMF just a provider of emergency finance and turn the World Bank into a provider of grants, not loans.

S. Hernandez, E. Gonzalez,D. Bejarano, L. Cabanilla,F.Lopez, A. Velez,R.Valencia, R.Ashley, S.Torres,J. Hinojosa, K. Collins, D.Stanko, J. Monterey

conclusions
Conclusions

S. Hernandez, E. Gonzalez,D. Bejarano, L. Cabanilla,F.Lopez, A. Velez,R.Valencia, R.Ashley, S.Torres,J. Hinojosa, K. Collins, D.Stanko, J. Monterey

conclusions117

Conclusions

Meltzer Commission

S. Hernandez, E. Gonzalez,D. Bejarano, L. Cabanilla,F.Lopez, A. Velez,R.Valencia, R.Ashley, S.Torres,J. Hinojosa, K. Collins, D.Stanko, J. Monterey

meltzer commission
Meltzer Commission
  • Established to oversee how American funds were being spent by international financial institutions.
    • Lobbied for reform within international financial institutions (e.g. World Bank, IMF, and WTO).
      • These Reforms would enhance global financial stability
      • Commission can monitor the world economy and focus on diminishing the probability of crises occurring.
    • Created the Bank for International Settlements to encourage efficiency and growth in world banking.

S. Hernandez, E. Gonzalez,D. Bejarano, L. Cabanilla,F.Lopez, A. Velez,R.Valencia, R.Ashley, S.Torres,J. Hinojosa, K. Collins, D.Stanko, J. Monterey

meltzer commission119
Meltzer Commission

Transparency about IMF, WB operations

Deficiencies in IMF-WB projects

Need to respect countries’ sovereignty

Green Agenda has been partly included

Poor PR job on part of reformers

Media has contributed to radicalizing debate

Foreign press supportive but pessimistic

IMF/WB on defensive, defending its scalp

S. Hernandez, E. Gonzalez,D. Bejarano, L. Cabanilla,F.Lopez, A. Velez,R.Valencia, R.Ashley, S.Torres,J. Hinojosa, K. Collins, D.Stanko, J. Monterey

meltzer commission120
Meltzer Commission

Need for WB/IMF administrative overhaul

WTO partial overhaul

More sensitivity to nationalism

Sharper mission statements

S. Hernandez, E. Gonzalez,D. Bejarano, L. Cabanilla,F.Lopez, A. Velez,R.Valencia, R.Ashley, S.Torres,J. Hinojosa, K. Collins, D.Stanko, J. Monterey