Latinnews Archive

Latin American Weekly Report - 11 July 1980

CONFERENCES: Pessimism prevails at anti-IMF talks

The International Monetary Fund (IMF) has lost its legitimacy and must be replaced by a new body. This was the conclusion of a four-day non-governmental conference, held in Arusha, Tanzania, last week. The delegates from 24 countries, mainly from the developing world, included Jamaican finance minister Hugh Small, ex-President Luis Echeverria of Mexico, Olaf Palme, the Swedish Social Democratic leader, and Andrew Young, former US ambassador to the United Nations.


The conference, which was organised by the Swedish-based Dag Hammarskjold Foundation, provided the political back-up for the conclusions of a meeting of economists in Jamaica last October. In a 16-point document, which has become known as the Terra Nova declaration, the economists examined the experiences of Jamaica, Peru and Portugal with the IMF in the 1970s. They concluded that, in preparing their economic diagnosis of a country's problems, the IMF used a set of prescribed procedures in a rigid and mechanical way.

The economists observed that, 'in spite of the harsh economic and social consequences of their programmes, no prior economic research is conducted, while a wealth of third world opinion is ignored.' 'Technical errors can -and have -been made, which are extremely costly in human and social terms. Not surprisingly, the fund cannot point to a single success story in the third world after more than 25 years of stabilisation programmes. '

The Arusha conference endorsed the economists' conclusion that, through its proven inadequacy, the IMF had lost its right to prescribe for the developing countries. In their document, the delegates call for 'the establishment of a universal and democratically-controlled international monetary authority in order to set up an equitable international monetary system.'

However, the delegates unexpectedly decided not to coordinate the demands that the developing countries will be making at the annual meeting of the IMF in Washington this autumn. Looking at their past record on influencing the IMF, the delegates decided that their chances of success were so slim that there was little point in even making the attempt.


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