|
Abstract:
Recurring financial crises in the semi-periphery have raised
serious question marks concerning the role of the IMF in the era
of financial globalization, particularly in the aftermath of the
Asian Crisis of 1997. The present paper attempts to provide a
critical and at the same time a balanced perspective on the
Fund’s involvement in crisis-ridden emerging markets with
special reference to the recent Turkish experience. The analysis
points towards both the limitations underlying the Fund’s
approach itself as well as some of the dilemmas faced by the
organization in trying to reform the economies of debtor
countries given the nature of the domestic political environment
in the countries themselves. It is also argued that the kinds of
reforms promoted by the Fund are necessarily incomplete in so
far as they focus only on the regulatory role of the state,
neglecting issues relating to income distribution and longer-term
development in the process. Two key conclusions follow. Firstly,
crisis-ridden countries need to develop a domestic political
base to “internalize” the kind of reforms sponsored by the
IMF, which are important in terms of their ability to benefit
from the process of globalization. Secondly, the countries
concerned need to extend their horizons and develop their
domestic capacities in areas such as income distribution and
longer-term competitiveness, areas that not traditionally
emphasized by the Fund.
JEL
Classifications: O19,
E65, F3
Keywords:
Financial globalization, crisis prevention and resolution, state
reform, external anchors
|
