[mgj-announce] MGJ: meet tonight; IMF: no clear proof globalization helps the poor

[Robert Weissman]

From: "Joey Hipolito" <jhipolito at ufcw.org>


We need everybody to come out tonight to the MGJ General Meeting tonight
at 7:30 at the Josephine Butler Center!

I realize that everybody is ridiculously busy with all of this anti-war
organizing however we need all MGJers to come out to this meeting as we
will make some really realy important decisions about what we will and
can do for the WB/IMF spring meetings which are in LESS than a month.

As facilitator, I'll make sure to keep the meeting going forward
however we need all hands on deck to make these decisions.

If you have any agenda items, send them to me at jhipolito at ufcw.org.

------

From: "Mark Rickling" <mrickling at hotmail.com>

Bastards admit the obvious, news at 11 :)

See you tonight!
mark



IMF-no clear proof globalization helps the poor
Mon March 17, 2003 06:15 PM ET
By Anna Willard
WASHINGTON, March 17 (Reuters) - The International Monetary Fund sounded 
more like its critics on Monday when it admitted there is little
evidence 
globalization is helping poor countries.

The IMF, which has often been the target of violent anti-globalization 
protests, in a new study found economic integration may actually
increase 
the risk of financial crisis in the developing world.

"Theoretical models" show that financial integration can increase
economic 
growth in developing countries, the research found, but in practice it
is 
difficult to prove this link.

"In other words, if financial integration has a positive effect on
growth, 
there is as yet no clear and robust empirical proof that the effect is 
quantitatively significant," the new report said.

An overview of the study, which was put together by four researchers 
including the fund's chief economist Kenneth Rogoff, describes the 
conclusions as "sobering".

The IMF often recommends that poor countries open their economies to
foreign 
investors and free-market policies. But critics say those policies
damage 
vulnerable economies, raising poverty rates and destroying the environment.

The fund's report found a small group of developing countries have
picked up 
the "lion's share" of capital flows as financial links between countries 
have become more integrated. Nations with good economic policies are
more 
likely to reap the most benefits and steer clear of financial crisis.

HIGHER RISK OF CRISES

International financial integration should also help countries to reduce 
economic volatility, the study said, but in reality this has not happened.

"Indeed, the process of capital account liberalization appears to have
been 
accompanied in some cases by increased vulnerability to crises," the
report 
said.

"Globalization has heightened these risks since cross-country financial 
linkages amplify the effects of various shocks and transmit them more 
quickly across national borders."

In the last 10 years, developing countries from Thailand and Russia to 
Argentina, have seen their economies collapse, even though many of them
were 
trying to follow IMF-prescribed open market policies.

CAUTION NEEDED

The paper concludes that countries must carefully balance integration in
the 
world economy with strong economic policies and the building of strong 
institutions, including banks and regulatory systems.

"The evidence presented in this paper suggests that financial
integration 
should be approached cautiously, with good institutions and
macroeconomic 
frameworks viewed as important," the IMF said.

But the report was unable to come up with a "clear road map" for how
this 
should be done. Such questions should be tackled on a case-by-case
basis, 
the IMF concluded.