G20 stimulus spending on track, says IMF

[CHIMO]

Source: Globe and Mail

WASHINGTON — The world's richest nations are on track to meet their pledge to spend the equivalent of 2 per cent of their gross domestic product fighting the financial crisis, according to a new estimate by the International Monetary Fund.

Brazil, Canada, Japan and the other members of the Group of 20 major economies will spend $820-billion (U.S.) on stimulus programs in 2009, compared with a March estimate of $590-billion, the fund said in a report Sunday.

The revision reflects programs announced within the last few weeks by Japan, South Korea and Russia.

Planned discretionary spending falls off slightly in 2010 to 1.5 per cent of GDP, the IMF said.



Read more: http://business.theglobeandmail.com/servlet/story/RTGAM.20090426.wstimulus0426/BNStory/Business/home

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IMF: As bad as ever

Well, that didn't take long. Just three weeks after leaders of the G20 countries agreed a historic deal to give $1.1 trillion in aid to crisis-hit economies, it seems to be unravelling. The back-slapping of the London summit gave way this weekend to the tension of the finance ministers' meeting in Washington. And many of their disputes came down to the International Monetary Fund. The IMF was the big winner of the London summit. It was made the main rescue vehicle to pull countries out of financial crisis and given up to $750bn in extra spending power. But as became clear this weekend, the money is still not agreed - and neither are plans to reform the Fund.

Some of this was an inevitable result of ambitious targets and stupid deadlines. Gordon Brown and his team were keen to get a big round number at the London summit, and the other leaders did not want to fly home empty-handed - so a communique emerged that was heavy on the zeros but rather lighter on the detail. Of the three major commitments of $100bn each, only Japan has coughed up, while the US and the EU are not even at the the-cheque's-in-the-post stage.

Delays are one thing; other problems are more fundamental. The emergence of the G20 as the major forum for dealing with this crisis was the west's way of acknowledging that it no longer had the monopoly on either resources or ideas to restructure the world economy. This is why Mr Brown declared at the London summit that the "Washington consensus is over". And yet the IMF has been one of the main arms of that orthodoxy, jetting its economists into crisis-hit countries with their one-size-fits-all remedies. The extra money was meant to be accompanied by a remodelling of the Fund, shifting it away from its old methods and making it more representative of shifting economic power. But we are a long way from that happening. Belgium - which has less than 50% of South Korea's national income, but 50% more representation at the IMF than Seoul - yesterday claimed the decision-making structure was "attractive". Of course it is - provided you come from Brussels.

Meanwhile, we still have the same old, bad old IMF. Dominique Strauss-Kahn, the Fund's head, claims it is now more flexible in its prescriptions to countries that come to it for emergency loans - yet it is still forcing Pakistan and others to cut spending in the depths of a crisis. And a new report from Christian Aid shows that IMF economists have pressured sub-Saharan African governments to cut taxes, so slashing social spending and weakening their states. A funny kind of reform, this, carried out by the same cast mouthing the same old lines.
http://www.guardian.co.uk/commentisfree/2009/apr/27/editorial-imf-international-financial-crisis

Looks to me that it is the same old same old.

Next watch out for the tightening of the belt people. All of us have to pull together to support the payoffs!