Trying to keep the IMF out

Subject: Trying to keep the IMF out Sat Nov 08, 2008 3:51 am

The International Monetary Fund’s reputation isn’t what it used to be. The organization, which was initially intended to monitor financial conditions and to deal with emergencies, turned itself into an aid agency and an arbiter of economic policy. More spectacularly, its policies failed and were rejected after the meltdowns in East Asia in the late 1990s, and later in South America in the early 2000s. Now, Turkey is trying to resist a bailout from the fund as it weathers the current crisis. Can it, and should it?

As Landon Thomas writes, Turkey is suffering from the same dearth of credit as the rest of the world. Turkey’s financial markets are better-developed than most in Central Asia, and, as such, its growth depends more on investment by domestic savers and others around the globe. Yet Turkey has gone from an basketcase characterized by budget deficits and rocketing inflation to a relatively stable, well-managed economy - not an obvious candidate for a bailout.

In times of crisis, however, countries that are already seen as somewhat risky have an even harder time attracting money. There has been a flight to safety, as the dollar’s rise has demonstrated; investors are buying dollars so they can hold supposedly safe, American securities. Still, the fund’s offer of help can seem like a Faustian bargain. By refusing, Turkey might have to make more sacrifices, like spending cuts and higher unemployment. But in the longer term, it could achieve something important: a perception that it can survive on its own, without help, charting its own economic policy without the strings attached by the fund. And in financial markets, perception tends to be reality. What would you do?

http://blogs.iht.com/tribtalk/business/globalization/?p=845
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Trying to keep the IMF out

Trying to keep the IMF out

Anarcho-Capitalist Categorical Imperatives

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