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Entries tagged "IMF"Page 1 • 2 Next
April 24, 2013 · By Sarah Anderson
The International Monetary Fund is accustomed to rallies outside their Washington, D.C., headquarters during their annual meetings. What was different this past weekend was that the activists on the outside and several high-profile government and financial industry speakers on the inside were calling for the same thing: a financial transaction tax.
Outside, around a thousand activists called on world leaders to adopt a small tax on trades of stocks, bonds, and derivatives that could raise massive revenue for jobs, climate, global health, and other public investments.
Inside, in a somber basement auditorium, the IMF hosted a debate on the same topic. The uniform on the outside was a green Robin Hood hat. On the inside, it was a charcoal gray suit. In both spaces, however, there was the sense that the financial transaction tax is gaining momentum and credibility.
The rally, sponsored by the Robin Hood Tax campaign, was not the largest to date, but it appeared to be the most diverse, with strong representation from labor, environmental, and global health groups, including National Nurses United, National Peoples Action, Friends of the Earth, Amalgamated Transit Union, Jobs with Justice, and Health GAP.
Inside the IMF, European Commission official Manfred Bergmann reported on the strong progress on his side of the Atlantic, where 11 EU governments are negotiating the final details of a coordinated financial transaction tax. The proposal on the table would tax stock and bond trades at 0.1 percent and derivatives trades at 0.01 percent. Expected revenues: as much as $45 billion per year. If the United States adopted a similar tax, it would raise an estimated $750 million to $1 billion over 10 years, Bergmann said.
Of course the IMF event was not without opposition voices. The strongest was Luc Frieden, the finance minister of Luxembourg, where a light regulatory and tax regime has boosted the size of the banking sector relative to GDP to a level similar to that of Cyprus. Frieden is particularly upset about the potential cross-border effects of the proposed EU tax.
Residents of non-participating countries will have to pay the tax if they trade with financial institutions in one of the 11 participating countries or if they trade financial instruments issued in one of those countries. The UK government has just launched a legal attack on the plan over this extra-territorial issue, a move Frieden applauded.
Avinash Persaud, a former senior executive of JPMorgan, UBS, and State Street banks, noted the irony of the UK's complaint. Britain's own Stamp Duty, introduced hundreds of years ago, is also extra-territorial. Trades of shares in British firms are taxed at 0.5 percent -- no matter who's doing the trading. An estimated 40 percent of the revenue comes from non-UK residents.
In a recent congressional hearing, U.S. Treasury Secretary Jack Lew also raised concerns about the extra-territorial impacts of the EU proposal. He failed to mention that U.S. investors have been subjected to the UK Stamp Duty and other countries' transaction taxes for some time now -- without the sky falling.
Nor did Lew acknowledge the many ways in which U.S. laws impose costs on non-U.S. entities. Take, for example, the 2010 Foreign Account Tax Compliance Act (FATCA), which requires foreign financial institutions to report information about financial accounts held by U.S. taxpayers to the IRS. Foreign banks have also complained about the extra-territorial implications of the Volcker Rule, the provision of the Dodd-Frank financial reform legislation which seeks to prevent deposit-taking banks from making bets with their own capital.
At the IMF, Persaud also scoffed at the Luxembourger's position that any transaction tax should be global: "Samuel Johnson said 'patriotism is the last refuge of scoundrels.' In this case, internationalism is the last refuge of scoundrels."
Indeed, many countries are already raising significant revenue from national financial transaction taxes. In addition to the UK, Persaud listed South Korea, Taiwan, South Africa, Switzerland, and Brazil among the countries that already have some form of the tax. He estimated their combined revenues at around $23 billion per year. Beyond the revenue benefits, Persaud argued that the current lack of taxation on trading activities creates "incentives to build edifices of value that are actually mirages" and can cause systemic risk.
The IMF event was the latest example of the Fund playing a constructive role in the debate. It didn't start out that way. In September 2009, the G20 assigned the IMF to prepare a report on "how the financial sector could make a fair and substantial contribution toward paying for any burdens associated with government interventions to repair the banking system." Initially, then-IMF Managing Director Dominique Strauss-Kahn said financial transaction taxes weren't even worth studying. In his view, such taxes were a "simplistic idea" that wouldn't work.
But in response to international public pressure, the Fund agreed not only to include the issue in their analysis but also to engage in civil society consultations. In the IMF report for the G20 leaders, they made clear their preference for other forms of financial sector taxation, particularly a "financial activities tax" on bank profits and compensation. Nevertheless, they also acknowledged that transaction taxes were administratively feasible and could raise significant revenue. And in a follow-up technical paper, they acknowledged that most G-20 countries, including Brazil, India, and South Africa, have already implemented some form of FTT. In October 2012, current IMF Managing Director Christine Lagarde said that the EU progress on a coordinated financial transaction tax was "clearly a good move."
At the debate, the Director of the IMF's Fiscal Affairs Department, Carlo Cottarelli, stressed that the IMF would still be pushing their "beloved" financial activities tax. But he admitted that since the IMF's 2010 report to the G20, there hasn't been much progress on that. "The momentum behind FTT was so strong, it was hard to turn in another direction. Sometimes life just isn't fair," he said with a laugh.
Follow Sarah Anderson on Twitter: www.twitter.com/Anderson_IPS
May 19, 2011 · By Lacy MacAuley
The hotel worker IMF chief Dominique Strauss-Kahn allegedly sexually assaulted likely suffered in her home country as a result of IMF policies, like so many of the world's poor.
Last month, I helped lead a march of hundreds of people to protest what we consider to be the International Monetary Fund's criminal behavior during its yearly spring summit with the World Bank. Along with others, I raised my voice to say, "Arrest the IMF!"
Now, Strauss-Kahn is in a jail cell. According to witnesses and other evidence, he sexually assaulted a female hotel worker in a shockingly violent act in a posh suite at the Manhattan Sofitel hotel. When the worker he allegedly attacked bravely broke free, Strauss-Kahn fled the scene, leaving behind personal items such as his mobile phone. The worker, who is an immigrant from the West African nation of Guinea, immediately told others what had happened to her. Law enforcement personnel caught up with him at JFK airport and pulled him off of the airplane minutes before his flight to Paris was scheduled to depart.
While the alleged details are shocking, it's no surprise to me that an IMF chief would exhibit violent, sociopathic behavior. After all, the IMF's austerity policies have assaulted poor countries for years.
The Fund is arguably the world's most powerful financial institution. It issues loans to countries undergoing economic and financial distress, mostly poor ones, though lately European Union members Ireland, Greece, and Portugal have become big customers. In exchange for cash in times of need, the IMF demands blood from the countries that it serves.
In return for its emergency loans, the Fund often forces countries to halt government services that people rely on, such as food subsidies for the poor, health care services, education benefits, and retirement benefits. The IMF presses countries to privatize national assets, selling off pieces of itself to corporations and the wealthy. It demands trade deregulation, allowing corporations to conduct business without any accountability to the government of the country. It tells countries to get rid of laws that protect the environment. As a result, inequalities deepen, and it's hard to see how many countries getting IMF loans really benefit.
Strauss-Kahn's alleged sex attack on an African immigrant is a harrowing metaphor for how the IMF treats the rest of the world. And in fact, it might be more than a metaphor. This very same woman may have suffered in her home country as a result of IMF policies, long before her life's journey brought her to the United States.
According to the woman's lawyer, Jeffrey Shapiro, she arrived in the U.S. from Guinea seven years ago under "very difficult circumstances." She has a 15-year-old daughter. The worker did not know that her attacker was the IMF chief until at least a day after the attack took place, he said.
As part of a global plan to reduce the debt extremely poor nations owed to international financial institutions and wealth governments, the IMF jumped into the country's economics more than 15 years ago, instituting game-changing domestic laws (called "structural adjustments") that would prompt privatization, especially in the mining sector. A detailed policy framework forced on Guinea by the IMF made allowances for a railroad and a deep-water sea port for exporting iron and aluminum shipments, but didn't make allowances for any new hospitals or schools. It ensured that the Guinean government would be "committed to privatizing the central pharmacy," which likely raised the rate of all basic medicines.
She didn't know it when she fought off her attacker, but this brave hotel housekeeper had likely been assaulted by the IMF before, through its cruel policies. Could the shifting factors of the global economy have caught her in its maw? Could these factors be what spurred her to make the dramatic decision to leave her home to emigrate to the United States?
She wouldn't be alone. Most immigrants cite economic factors as major reasons that they move here. Too often, global strings are pulled by wealthy financiers, and people suffer.
Just as the woman Strauss-Kahn allegedly attacked fought him off, we as a unified global community must fight back against the IMF's destructive policies. It starts with raising our voices in protest against this financial powerhouse that is assaulting the poor.
May 18, 2011 · By Emily Schwartz Greco
Most of the reporting on jailed, soon-to-be-former, International Monetary Fund (IMF) chief Dominique Strauss-Kahn is shifting. Instead of just relating accounts of the sexual-assault charges he faces, journalists are raising questions about his past. It's rife with incidents that may have constituted sex crimes, even if charges weren't filed. And there's a great deal of discussion about the lack of reporting on his earlier, newsworthy misdeeds.
In case you're someone who thinks that IMF stands for "Incredibly Monotonous Figures," and have managed so far to ignore the news: New York prosecutors say Strauss-Kahn attempted to rape a hotel housekeeper in his $3,000-a-night Manhattan hotel suite. He denies the charges. Instead of flying to Europe to meet with German Chancellor Angela Merkel, reportedly to discuss Greece's debt, he landed at the Riker's Island prison.
As my colleague Tiffany Williams has written, the alleged victim isn't getting enough attention, which is indicative of a broader problem in our society. According to this Associated Press article, she's a 32-year-old woman from the West African nation of Guinea, currently in "seclusion." The AP story also uses a term that should be dropped, especially in this case.
"The (French) left-leaning newspaper Liberation affirmed Wednesday that its journalists 'will continue...to respect the private lives of men and women' it covers, with the exception of suspected sexual crimes. But it conceded that its journalists are asking whether they should have more strongly pursued rumors about Strauss-Kahn's womanizing."
Womanizing? As Susan Mulligan explains, it's time to ditch that word altogether. "It turns an entire sex into a collective object to be used or victimized by men," she explained in a short, excellent US News blog post. She also makes a strong case for journalists to stop using the antiquated term "mistress," which offensively suggests that women are property. (Got that, reporters covering and bloggers musing about the political misfortunes of John Ensign, Newt Gingrich, and Arnold Schwarzenegger?)
Strauss-Kahn, who married the first of his three wives at age 14 and reportedly tried to force writer Tristane Banon to have sex with him in 2002 following an interview, isn't in trouble for having a strong libido. He's behind bars on charges that include attempted rape, following years of getting away with sexual behavior that may have been criminal. There are more precise terms to use than "womanizer," such as "suspected sexual predator," even if he was widely seen a strong contender for France's presidency.
Sadly, the IMF squandered an opportunity three years ago to ditch Strauss-Kahn before this incredibly ill-timed embarrassment, which coincides with such weighty things as Egypt's pursuit of a $4 billion loan, and Europe's debt crisis. In 2008, the Fund's executive board merely reprimanded him for carrying on an inappropriate relationship with Piroska Nagy, a Hungarian economist who at the time was his subordinate. The liaison was deemed to be consensual, but at the time, Nagy wrote a letter to a firm hired by the IMF that Strauss-Kahn was a "man with a problem that may make him ill-equipped to lead an institution where women work under his command."
The IMF's executive board has the authority to hire and fire the IMF's top official and could have sent the Frenchman packing right then and there, echoing Paul Wolfowitz's fate.
The Iraq War architect's tenure at the helm of the World Bank was cut short after his girlfriend Shaha Riza, another official at the international financial institution, was found to have obtained a series of outsized raises and to have gotten highly paid for work as a contractor with an outside firm, without permission from her employer. After that series of suspect pay hikes, "her non-taxable salary of $193,590 exceeded the amount earned by (then) Secretary of State Condoleezza Rice by approximately $40,000 annually," according the Government Accountability Project, which played a crucial role in exposing the Riza-Wolfowitz scandal.
Emily Schwartz Greco is the managing editor of OtherWords, an Institute for Policy Studies editorial service that provides bold opinions for newspapers and new media.
May 17, 2011 · By Tiffany Williams
As details emerge in the case of International Monetary Fund chief and alleged assaulter Dominique Strauss-Kahn, my eye is on how his wrecked political clout is getting all the attention. The brutal assault of a hotel housekeeper that Manhattan District Attorney Artie McConnell described yesterday to a judge, who subsequently ordered that the IMF's managing director be held without bail at the Rikers Island jail complex? Not so much.
The IMF leader was (I think it's safe to use the past tense here because it’s doubtful he'll re-emerge in politics, regardless of the outcome of this apparently damning case) a very likely French presidential candidate. In fact, he was widely seen as the Socialist Party's best hope for unseating French President Nicolas Sarkozy. Within hours of the story breaking, comments about a "Sarkozy setup” flooded the comments sections of online news reports, and soon emerged as their own articles.
As this story develops, it's all about Strauss-Kahn, instead of the woman (so far unidentified), who accuses him of brutally attacking her. At her workplace. This woman, who was cleaning a $3,000-per-night hotel suite, is a human being. She deserves compassion as the global punditocracy conjectures about what's going happen to the IMF without that French "rockstar" at its helm.
My work focuses on the trafficking and exploitation of immigrant domestic workers. Of course, I'm reading the news coverage with interest. Over the past days, I have been watching how HER story is covered, in light of her occupation, ethnicity (reporters say that she's an African immigrant), and status as a crime victim. Usually, housekeepers are treated as silent, anonymous machines of the household, hotel, or office building, if they're noticed at all. But surely a vicious attack would shed light on the fact that this is a real person…right?
While I mostly work with household workers in private homes, the life of a hotel chambermaid is very similar. Being a housekeeper at a hotel (or anywhere else) doesn't exactly put you on equal footing with the wealthy and powerful when you are in "their" space. So when you're stuck in a bedroom (or private household) with them, what are your defenses?
Statistics about the frequency of sexual assault of hotel maids are difficult to find, but here's what I know about New York City's household workers, from a 2006 report by the Data Center and Domestic Workers United: "Thirty-three percent of workers experience verbal or physical abuse or have been made to feel uncomfortable by their employers. One-third of workers who face abuse identify race and immigration status as factors for their employers’ actions." What we do know about the conditions of hotel housekeepers is that immigrants comprise the majority of that workforce, as do women of color, and that their workplace is dangerous on its own, let alone with the additional risk of sexual assault. Rushing to keep up with demand, hotel housekeepers have an injury rate 40 percent higher than workers in the overall service sector.
I have many other questions too. The two that come to mind immediately are:
- Do Europeans and North Americans just assume that being subjected to sexual aggression is a given if you're a woman working as a maid in a wealthy man's home or hotel suite?
- Why would anyone assume that a working-class woman would lie about a sexual assault to get money from a settlement?
I can't fathom why anyone would believe these things, but here we are in the comments section in Vanity Fair, The New York Times, and ABC News where every fourth word is "setup" and where the maid's getting very little empathy. I don’t think the people writing these comments or news stories are malicious. It's just a symptom of the way household workers are treated in the United States and around the world. They are servants, and therefore — for hotel guests and the people who can afford to have them clean their homes — barely human.
Strauss-Kahn's lawyer Benjamin Brafman said that he represents "good people who have gone astray…that doesn’t mean their lives should be destroyed." The themes of many of the reports and commentaries I have read center around the feeling that it would be a tragedy for this politician's career, and his removal would put the global economy at risk.
Because this "just" involves a hotel housekeeper, there's not a lot of conjecture about the tragedy she'll face as she tries to put her own life back together. Even if the reason that reporters aren’t covering her story with humanity is that they want to respect our legal system's promise of "innocent until proven guilty," they're missing the broader point: this storyline isn't uncommon. No one is talking about the countless other household and hotel workers who have endured sexual harassment and assault at the hands of wealthy (or even middle-class) men around the world.
Why? Perhaps because it's supposed to be a fact of life that poor women’s bodies are collateral damage of war, prizes for global accomplishment, or simply a means to an end. Women who are household workers or "servants" are even more vulnerable to dehumanizing sexual assault than others because their relationships are inherently unequal to their employers. We don’t have scientific studies of the relative risks, but we have hundreds of testimonies of household workers who have been trafficked, exploited, and assaulted, and our common sense that tells us there are many more out there.
Of course it isn’t uncommon that famous/wealthy men who assault women usually dominate the news. What will Strauss-Kahn do next? Even when their conduct is deemed improper without being illegal, there's a lot of hand-wringing over how prominent men such as former Gov. Arnold Schwarzenegger, former New York Attorney General Eliot Spitzer, and former Sen. John Edwards, will suffer for their indiscretions.
But I feel worse for the woman Strauss-Kahn is accused of assaulting.
January 31, 2011 · By Sarah Anderson
Who says economic policy has to be polarizing? In a remarkable sign of consensus, more than 250 economists across the ideological spectrum have signed a letter to the Obama administration in support of capital controls.
Until quite recently, this would have been unthinkable. For decades, the International Monetary Fund and the U.S. government led a crusade to eliminate capital controls, which include taxes and other measures to manage cross-border "hot money" flows.
As part of a broader liberalization agenda, the IMF used loan conditions and the U.S. government used trade and investment agreements to try to end such policies. U.S. officials even insisted that trade rules allow foreign investors to sue governments in international tribunals over violations of their "rights" to free capital mobility.
Then, after several countries used capital controls effectively to insulate themselves from the ravages of the 1990s financial crises, the IMF's opposition began to soften. And since the 2008 financial meltdown, the IMF has actually recommended such controls in certain circumstances, such as to prevent massive capital flight in Iceland or to stem assest bubbles in emerging markets.
The U.S. government, meanwhile, has carried on the old crusade and now has trade or investment agreements with 52 nations that prohibit capital controls.
In the statement delivered to to the Obama administration, economists are urging the Obama administration to end these outmoded policies. Initiated by the Institute for Policy Studies and the Global Development and Environment Institute at Tufts University (GDAE), the letter carries endorsements from:
- Former IMF Economists: e.g., Arvind Subramanian, now a Senior Fellow at the Peterson Institute for International Economics, and Olivier Jeanne, a Professor at Johns Hopkins University.
- Free Trade Supporters: e.g., Center for Global Development President Nancy Birdsall and her colleague Kimberly Elliott, who, while critical of capital control restrictions, have been generally supportive of U.S. trade policies, from the Central America pact of 2005 to the pending U.S.-Korea deal.
- A Nobel Laureate: Joseph Stiglitz.
- Former High-ranking Government Officials: Harvard's Ricardo Hausmann, a former Inter-American Development Bank Chief Economist and Minister of Planning of Venezuela; Y. Venugopal Reddy, former Governor of the Reserve Bank of India; and José Antonio Ocampo, former Finance Minister of Colombia.
As the letter points out, this is a timely issue since "in recent months, a number of countries, from Thailand to Brazil, have responded to surging hot money flows by adopting various forms of capital regulations."
The Obama administration has ample opportunities to bring a fresh approach to ongoing negotiations in its:
- Efforts to conclude pending trade agreements with Colombia, Korea, and Panama.
- Review of the U.S. model bilateral investment treaty, which will be the basis for new deals with India, China, and several other countries.
- Talks over a "Trans-Pacific Partnership Agreement" with eight other nations.
Making sure these deals don't prevent governments from using sensible capital controls would be one important part of a pro-worker, pro-environment, pro-democracy trade reform agenda. If we've learned anything from the current crisis, it's that we're living in a globalized financial system, where chaos in one part of the world can be devastating for businesses and workers elsewhere.