Thursday, 2 April 2009
Increased Chinese influence at the IMF
The IMF is looking for increased funding; its managing director has said here that funds should be at least doubled, with potentially more required. China is probably going to be a major source of finance. How the resulting influence will affect IMF lending practices is unclear. On one hand, the IMF may start lending more to countries with whom China has close foreign policy relations; on the other, there may be the UN security council outcome, where IMF lending to either Western or Chinese clients is subject to veto by the other parties. A third possibility is that much of the lending and conditionalities will not change, as the IMF is influenced in large part by current academic understanding and fashions of development policies. The 1980s Washington Consensus policies did not happen solely because they were perceived by donors to be in their own interests, but also because they had been academic standard in the previous decade (as always, by the time they were implemented, intellectuals had proposed better models).