Crises and the bretton woods institutions and the crises of the bretton woods institutions

Abstract

The daily focus in the media on the financial crisis in the United States and Europe has overshadowed discussions of the impact of the crisis on the poorest regions of the world where millions of people live on the edge of an abyss that threatens their very survival. Moreover, in the wake of the crisis, and as a result of recent G20 meetings, there has been an unprecedented expansion in the resources and authority of the Bretton Woods Institutions with barely a whisper about their role in promoting an agenda which has been largely antithetical to the development process. Countries that had sworn they would not deal with the Fund have reversed course and are back at the door of the IMF now heavily supported by the G20. This paper will focus on recent lending patterns of the Bank and Fund, the impact of the new crisis on Bank and Fund policy, and the role of the G20. The paper will argue that reforms in the governance and policy structures of the Fund and Bank have been wholly inadequate in view of the miserable track record of these institutions. There are dangers in continuing with the past trajectory of the Bank and Fund whose strategies have left poor countries structurally enfeebled and susceptible to feeling the full effects of the vicissitudes of the global economy. We will begin with a brief background with a focus on recent Bank and Fund lending patterns.