- The Washington Times - Monday, April 30, 2001

Its a shame the protesters who targeted the trade-orientated Summit of the Americas in Quebec didnt turn their sights instead on the International Monetary Funds (IMF) spring meeting, which this week is bringing together finance ministers and central bankers from around the globe. It appears that anti-globalization demonstrators are protest-weary after having so vigorously intervened in Quebec and now have little energy left for the IMF. Pity.
Although free trade often creates challenges for industry and workers around the world in the short or medium term, it is a net positive for the countries involved over the long term. And, most importantly, free trade helps stimulate economic growth a catalyst for democratic freedoms.
However, the IMF, which doles out million-dollar bailouts to countries in economic trouble, functions inversely to free trade. While an IMF loan brings some short-term liquidity and stability to crisis-stricken countries in the short-term, over the longer term this aid generates a false sense of security created not by economic fundamentals but through borrowed liquidity. This for-a-fee stability prompts policy-makers to postpone reform that is often desperately needed. Consequentially, countries are left in debt and poised for another more intense crisis. Whats more, IMF loans bailout high-rolling speculators who profit wildly from risky investments in the emerging world while the taxpayers are left with the bill.
It has become clear where President Bush stands. During his second presidential debate against Democratic candidate Al Gore, Mr. Bush demonstrated some healthy skepticism of the efficacy of IMF bailouts, claiming that some of the $4.8 billion IMF loan to Russia in 1998 had "ended up in Viktor Chernomyrdins pockets." And Treasury Secretary Paul ONeill echoed that sentiment in press interviews earlier this year, stating "Most observers would say what happened in Russia was … not a surprise. Have you ever tried to do business in Russia?"
But the Bush White House is now giving unrestrained endorsement to an IMF bailout of Turkey, which has already slowed the pace of reform there. Calling Turkey "an important ally and good friend," Mr. ONeill said in a statement that "The United States continues to back the IMFs ongoing support for Turkeys economic-reform program." So it seems after all that the Bush administration has lost its reservations about IMF bailouts and that is worth protesting.

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