The violence of anti-capitalist demonstrators and indeed of the police, whose job was to contain them, disfigured the latest round economic summitry at Genoa last month. As a result, the World Bank and the IMF have decided to cut the length of their annual meeting, which this year is being held in Washington. The event which has come to run for six days from the last weekend in September is being scaled back to just two days.
Many participants ought to welcome this development. The annual meetings of the world’s central bank chiefs and finance ministers, held every alternate year in another capital city, have turned into a hectic and, in many ways, absurd jamboree of lobbyists, marketing men and snake-oil salesmen. Thousands of delegates flock in for a round of often-debauched parties, many of which are thrown by some of the hundreds of lobby groups.
This is not to say that the World Bank and IMF gatherings are pointless. The delegates all represent member countries and have a responsibility to review the workings of both organizations over the previous year. It is also an extremely useful opportunity for central bankers, the professionals of the world monetary system, to sit down quietly and exchange serious thoughts. Finance ministers, in contrast, tend to use the occasion for grandstanding before their country’s press representatives, and adding to their political standing back home by seeming to be in deep debate with the illustrious likes of Federal Reserve Chairman Alan Greenspan.
Probably more than at any of the other economic summits to which politicians seem to have become addicted in recent decades, real issues can be tackled realistically, because the real players, the central bankers, are present. Nevertheless, the World Bank and the IMF are not just about the economic big rollers of the G-7. They are also responsible respectively for promoting the economic development of the Third World and protecting the finances of individual countries, so as not to have the wider world financial system contaminated by the virus of a financial failure in one country.
Unfortunately, in the final press release at the end of every World Bank and IMF meeting, the problems of the developing world too often take second or third place to grave pronouncements about the financial health of the First World. For the last few years, however, both organizations have woken up to the need to review Third World debt, which continues to stand at levels for which there is no realistic hope of repayment. Debt forgiveness, tied to the imposition of realistically better financial housekeeping, remains a key issue, which has not yet been embraced by all the rich countries of the First World.
The IMF also continues to treat struggling countries inconsiderately, often still demand the imposition of controls that bear little relation to a country’s capacities. A typical example is that a Third World African state tighten up tax collection. Poverty-stricken states often simply do not have the bureaucratic systems to run a fair taxation system properly and many citizens, living at subsistence level, have precious little spare cash to pay up. So in their foreshortened meeting this year, delegates in Washington can concentrate on the real business and then hurry back to their desks around the world and get on with their work.
