1875 Connecticut Avenue NW, Suite 1012 , Washington D.C., United States
Apr 13, 2007
3:00 PM - 5:00 PM (GMT-5)
A discussion featuring presentations by:
- Nancy Alexander, Globalization Challenge Initiative, Washington, DC
- Sun Baohong, Counselor, Policy Analysis Section, Embassy of the People’s Republic of China
- Oscar Ugarteche, Universidad Nacional Autónoma de México
- Mark Weisbrot, Center for Economic and Policy Research, Washington, DC
- Ruth Castel-Branco, 50 Years Is Enough Network, Washington, DC
The collapse of the International Monetary Fund's (IMF) policy influence, legitimacy, and relevance across many parts of the Global South is one of the most critical changes in the international financial system. Alternative sources of financing are now emerging, where policy conditions do not accompany loans and investments, thus increasing national policy space to choose the best mix of policies possible for individual nations to achieve sustainable and equitable economic development. In Latin America, the government of Venezuela is an alternative financing source whose loans overshadow that of the IMF's and come without policy conditions. In Asia, China is playing the role of lender and investor. The proposals for a Bank of the South in Latin America and the Chiang Mai Initiative in Asia Pacific as regional funds are also important developments. Recent debt cancellations in Sub-Saharan countries is also a financing mechanism which yields expanded policy space.
At the same time, the Development Assistance Committee (DAC) of the Club of Western nationsthe Organization for Economic Cooperation and Development (OECD) is implementing an "aid effectiveness" initiative that would unify all donors and creditors in a large-scale "aid cartel." Any diversity in policy approaches and conditions attached to aid that exists in the international aid system is under the threat of disappearing, as aid policies are consolidated under the auspices of the OECD/DAC. To what extent can alternative sources of financing and increased national policy space enable developing countries to avoid dependence on such an "aid cartel"?
The panelists addressed perspectives from various parts of the Global South: Latin America, Sub-Saharan Africa, and China. Some questions that guided the panel discussion were: How is the "aid effectiveness" process unifying donors and creditors into a policy cartel? How do alternative sources of financing increase national policy space in comparison to IFI financing? Are these alternative financing sources sustainable in the long-run? Are there country-level examples where such financing mechanisms have directly led to governments implementing development-oriented economic policies? Which serve as models for replication in other regions? Do any alternative financing initiatives carry attached policy conditions? If yes, how do they differ from the policy conditions of the IFIs?
Event Sponsors: Jubilee USA, Action Aid USA, Gender Action, 50 Years is Enough Network, Center for Economic and Policy Research, and the Center of Concern.