The use of the IMF G-20: more of the same?
08/04/2009Earlier this month the world's major economies have come together in London to discuss joint actions to overcome the current economic and financial crisis, meeting known as G-20. Broadly speaking, the parties involved agreed to provide US $ 1,1 trillion to the global economy.
The value is impressive and caused euphoria in global markets. Stock markets responded positively and a more united speech began to gain prominence. At least apparently, different interests managed to converge on a common plan, able to guide the new direction of the world economy.
The point is that what has been agreed does not support a deeper analysis of the reality of US $ 1,1 trillion. When closely analyze the resources and their sources, We realize that part is not new feature and elsewhere even real feature is.
The International Monetary Fund (IMF) It has emerged as the biggest "winner" of the G20 meeting. On one side it emerged as the winner of US $ 500 billion and, at the same time, It was taken from the scene any serious discussion or even future commitment to discuss a reform of the institution, making it more responsive and appropriate to the current global economic reality.
however, dos US$ 500 billion pledged, only $ 200 billion appeared, from the European Union and Japan. The remaining US $ 300 billion have predetermined sources. As far as is known, United States pledges US $ 100 China billion and another $ 40 billion. Even if these two meet with promises still unofficial, the bill does not close. The most that would be US $ 340 billion.
Yet under the IMF, the use of resources also is problematic. Dos US$ 500 billion, US$ 250 billion should be made available by the Fund in terms of Special Drawing Rights (OF). Like this, this money will not be directed to the poorest countries, who need resources to keep their economies running. Instead, it was decided that DES would be allocated to IMF members, in proportion to their votes (or quotas). It should be noted that, thus, 44% of the funds will go to the richest countries. Poor countries will get no more than US $ 90 billion.
In this scenario, It is doubt about the ability of the G-20 will have to effectively forward solutions to the crisis. It would be just empty talk stalling, or effectively the performance of the G-20 regarding the IMF is only one way to confirm a bit more of the same?
Originally published in FinancialWeb
http://www.financialweb.com.br/blogs/blog.asp?cod=98