In the crisis financial like at this time many countries tried to survive. There were various methods survive in economic crisis like one of them looked for loan fund to International Monetary Fund (IMF) .
International Monetary Fund (IMF) are international organisation responsible in arranging financial system global and provided loan to IMF member countries to help problems of balance finance respectively country ,and IMF Loan to be given country experienced balance of payments difficulty of could restore again international reserve, maintaining stability of currency, and could finance import that was needed. And also helped countries experienced serious economic difficulty, and repayment, country was obliged to carry out certain policies, for example State Owned Company Privatisation/Privatitation.
Background of IMF started when United Nation sponsored Money Conference and Monetary in Bretton Woods, New Hampshire,United States on July 22, 1944. Article about IMF Agreement was current from December 27 1945, and IMF organisation was formed in May 1946, as part of postwar reconstruction plan of World War II and began financial operation on March 1 1947.
IMF with Bank for Internasional Resolution and the World Bank, often also was acknowledged as Bretton Woods institution. Three institutions determined monetary policy followed by almost all countries market economy. For big country and in middle stage from development of economics, almost did not have success story from program of IMF. Many of IMF patients only recovered now, to afterwards crisis relapsed again so as to become IMF patient (repeated patients). Many examples of case in North America and Africa how IMF medicine only generic medicine level of effectiveness was very low.
Indonesia have bad experience when need help to IMF. Consciously or not realising, efforts invited IMF to push destruction of Indonesian economics to crisis chasm that more in. Economic crisis 1997/1998 are crisis was worst in history of Indonesian economics. Indeed must be acknowledged much of internal weaknesses of Indonesian nation, before and after crisis. As the nation, Indonesia did not have alternative except for must carry out correction and must be harder against himself. But, internal weakness of Indonesian nation changed to misfortune with wrong existence of diagnosis and was wrong medicine from IMF.
Actually already many academic circles in America that did was critical of effectiveness of IMF program, for example Prof Alan Meltzer from Carnegie Mellon University, Prof John B Taylor from Stanford University, Prof Krugman from IMT, Prof Jeffrey Sachs from Columbia University, and former Representative President World Bank & winner Nobel Economi in 2001 Prof Joseph Stiglitz. They criticised about low level of effectiveness IMF program. Failed of IMF program was especially caused by factor as follows:
First, diagnosis and IMF medicine/solution almost same (generic) for all the case all over the world was based on approach simple financial programming. In fact, every country have different problem about structure of economics and complexity.
Second, IMF program approach especially be based increase in burden of debt to support position balance of payments. "Improvement" of balance of payments with increase in debt only fake improvement, unreal, because not results of increase in capital current of private enterprise and increase in export netto. IMF loan only increased gross foreign exchange reserve (gross reserves), but in no way increased foreign exchange reserve netto (net reserves). In other words, Indonesia experienced loss opportunity because continually carried out loan to inflate balance of payments.
In Indonesian case, for example, IMF achievement are increase in burden of Indonesian debt (domestic and foreign) to double for five program years of IMF. That formula equally current with many countries in North America. Not strange if in country, where IMF program succeeded in creating financial stability, stability was temporary because of being supported increase in burden of debt. In Indonesian case, for example, addition of burden of domestic and foreign debt resulting from IMF program increased twice. IMF left time bomb in form of domestic debt obligation increased from zero rupiah became 650 trillion rupiah.
IMF also often forced prerequisite (conditionalities) abundant often was not related directly to efforts to carry out monetary and financial stabilisation. According to Stiglitz, "IMF forced too many prerequisites (conditionalities), some of political and often entered micro-economics territory, apart from mandate excessive prerequisite, IMF program did not have focus and precisely lost priority in handling of crisis.
Third, IMF program included field apart from professional capacity and main competence staff IMF. Competence main of IMF are macroeconomics field and monetary. Staff's of IMF majority was Phd in macroeconomics field and monetary. But, prerequisite and IMF policy recommendation in various letter of intent more often included field outside monetary and macroeconomics, like banking, agriculture, corporate restructuring, industry, etc and is not from professional capacity staff's majority IMF. Whatever, not strange for IMF recommendation in banking field, for example, often precisely was not able to improve health of sector of banking. For example, IMF recommendation to close 16 banks in November 1997, with capasity adequate, precisely created financial destabilisation and destroyed community's belief in national banking as well as pushed bankruptcy of most banks in Indonesia.
In case of banking, IMF that was invited to carry out stabilisation evidently precisely carried out destabilisation in sector of banking. Various wrong diagnosis and wrong IMF medicine pushed Indonesian economics experienced hard landing, mass bankruptcy and happened million unemployee. In 1998, Indonesian economics experienced backward growth 13 %, worst throughout history Indonesian economics.
If Indonesia chose to leave IMF, then Ukraine, Iceland and Hungary precisely immediately will become to be IMF patient. Ukraine,Iceland and Hungary hoped loan from IMF could help them to leave crisis. IMF beforehand said carried out discussions with 5 countries for package of help faced crisis with Hungary, Iceland, Pakistan, Ukraine and Belarusia. IMF officially made an announcement achieved loan agreement US$ 16.5 billion with Ukraine. The package of help like had been received by Indonesia, will be used to help country to maintain level of growth and financial stability. Loan must be still getting agreement from IMF management and Eksekutif Council, as well as agreement from legislation in Ukraine.
"Ukraine developed package with policy comperehensif, was designed to help country to fill balance of payments that was needed resulting from kolaps price of steel, market unrest finansil global and was connected with financial Ukrainian system difficulty," said Managing Director IMF, Dominique Strauss-Kahn.
IMF also announced achieved agreement with Iceland for package of help with a value of US$ 2.1 billion. IMF mission and Iceland government today achieve agreement for agreement program referendum loan of economics SDR 1.4 billion or around US$ 1.2 billion," statement from IMF. Package of same help must get agreement from Council of Eksekutif IMF in November. Iceland furthermore immediately could attract SDR 560 million or around US$ 833 million after agreementof deal.
Now as being quoted from AFP, Strauss-Kahn announced IMF achieved to help agreement for Hungary, immediately will be announced in several last days. It was not yet known how many
I'am very frightened if fund loan like Ukraine, Iceland and Hungary experienced similar fate as Indonesia experienced destruction when loan fund to IMF. IMF will try to carry out intervention in policy of economics of country. I only hoped this estimate was wrong. How according to you about the IMF?
International Monetary Fund (IMF) are international organisation responsible in arranging financial system global and provided loan to IMF member countries to help problems of balance finance respectively country ,and IMF Loan to be given country experienced balance of payments difficulty of could restore again international reserve, maintaining stability of currency, and could finance import that was needed. And also helped countries experienced serious economic difficulty, and repayment, country was obliged to carry out certain policies, for example State Owned Company Privatisation/Privatitation.
Background of IMF started when United Nation sponsored Money Conference and Monetary in Bretton Woods, New Hampshire,United States on July 22, 1944. Article about IMF Agreement was current from December 27 1945, and IMF organisation was formed in May 1946, as part of postwar reconstruction plan of World War II and began financial operation on March 1 1947.
IMF with Bank for Internasional Resolution and the World Bank, often also was acknowledged as Bretton Woods institution. Three institutions determined monetary policy followed by almost all countries market economy. For big country and in middle stage from development of economics, almost did not have success story from program of IMF. Many of IMF patients only recovered now, to afterwards crisis relapsed again so as to become IMF patient (repeated patients). Many examples of case in North America and Africa how IMF medicine only generic medicine level of effectiveness was very low.
Indonesia have bad experience when need help to IMF. Consciously or not realising, efforts invited IMF to push destruction of Indonesian economics to crisis chasm that more in. Economic crisis 1997/1998 are crisis was worst in history of Indonesian economics. Indeed must be acknowledged much of internal weaknesses of Indonesian nation, before and after crisis. As the nation, Indonesia did not have alternative except for must carry out correction and must be harder against himself. But, internal weakness of Indonesian nation changed to misfortune with wrong existence of diagnosis and was wrong medicine from IMF.
Actually already many academic circles in America that did was critical of effectiveness of IMF program, for example Prof Alan Meltzer from Carnegie Mellon University, Prof John B Taylor from Stanford University, Prof Krugman from IMT, Prof Jeffrey Sachs from Columbia University, and former Representative President World Bank & winner Nobel Economi in 2001 Prof Joseph Stiglitz. They criticised about low level of effectiveness IMF program. Failed of IMF program was especially caused by factor as follows:
First, diagnosis and IMF medicine/solution almost same (generic) for all the case all over the world was based on approach simple financial programming. In fact, every country have different problem about structure of economics and complexity.
Second, IMF program approach especially be based increase in burden of debt to support position balance of payments. "Improvement" of balance of payments with increase in debt only fake improvement, unreal, because not results of increase in capital current of private enterprise and increase in export netto. IMF loan only increased gross foreign exchange reserve (gross reserves), but in no way increased foreign exchange reserve netto (net reserves). In other words, Indonesia experienced loss opportunity because continually carried out loan to inflate balance of payments.
In Indonesian case, for example, IMF achievement are increase in burden of Indonesian debt (domestic and foreign) to double for five program years of IMF. That formula equally current with many countries in North America. Not strange if in country, where IMF program succeeded in creating financial stability, stability was temporary because of being supported increase in burden of debt. In Indonesian case, for example, addition of burden of domestic and foreign debt resulting from IMF program increased twice. IMF left time bomb in form of domestic debt obligation increased from zero rupiah became 650 trillion rupiah.
IMF also often forced prerequisite (conditionalities) abundant often was not related directly to efforts to carry out monetary and financial stabilisation. According to Stiglitz, "IMF forced too many prerequisites (conditionalities), some of political and often entered micro-economics territory, apart from mandate excessive prerequisite, IMF program did not have focus and precisely lost priority in handling of crisis.
Third, IMF program included field apart from professional capacity and main competence staff IMF. Competence main of IMF are macroeconomics field and monetary. Staff's of IMF majority was Phd in macroeconomics field and monetary. But, prerequisite and IMF policy recommendation in various letter of intent more often included field outside monetary and macroeconomics, like banking, agriculture, corporate restructuring, industry, etc and is not from professional capacity staff's majority IMF. Whatever, not strange for IMF recommendation in banking field, for example, often precisely was not able to improve health of sector of banking. For example, IMF recommendation to close 16 banks in November 1997, with capasity adequate, precisely created financial destabilisation and destroyed community's belief in national banking as well as pushed bankruptcy of most banks in Indonesia.
In case of banking, IMF that was invited to carry out stabilisation evidently precisely carried out destabilisation in sector of banking. Various wrong diagnosis and wrong IMF medicine pushed Indonesian economics experienced hard landing, mass bankruptcy and happened million unemployee. In 1998, Indonesian economics experienced backward growth 13 %, worst throughout history Indonesian economics.
If Indonesia chose to leave IMF, then Ukraine, Iceland and Hungary precisely immediately will become to be IMF patient. Ukraine,Iceland and Hungary hoped loan from IMF could help them to leave crisis. IMF beforehand said carried out discussions with 5 countries for package of help faced crisis with Hungary, Iceland, Pakistan, Ukraine and Belarusia. IMF officially made an announcement achieved loan agreement US$ 16.5 billion with Ukraine. The package of help like had been received by Indonesia, will be used to help country to maintain level of growth and financial stability. Loan must be still getting agreement from IMF management and Eksekutif Council, as well as agreement from legislation in Ukraine.
"Ukraine developed package with policy comperehensif, was designed to help country to fill balance of payments that was needed resulting from kolaps price of steel, market unrest finansil global and was connected with financial Ukrainian system difficulty," said Managing Director IMF, Dominique Strauss-Kahn.
IMF also announced achieved agreement with Iceland for package of help with a value of US$ 2.1 billion. IMF mission and Iceland government today achieve agreement for agreement program referendum loan of economics SDR 1.4 billion or around US$ 1.2 billion," statement from IMF. Package of same help must get agreement from Council of Eksekutif IMF in November. Iceland furthermore immediately could attract SDR 560 million or around US$ 833 million after agreementof deal.
Now as being quoted from AFP, Strauss-Kahn announced IMF achieved to help agreement for Hungary, immediately will be announced in several last days. It was not yet known how many
I'am very frightened if fund loan like Ukraine, Iceland and Hungary experienced similar fate as Indonesia experienced destruction when loan fund to IMF. IMF will try to carry out intervention in policy of economics of country. I only hoped this estimate was wrong. How according to you about the IMF?
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