One more time "Never believe a rumor until it is oficially denied"
World Bank Denies Criticism of IMF
Thursday, 3 December 1998
W A S H I N G T O N (AP)
WORLD BANK President James Wolfensohn denied published reports
Thursday that the bank had criticized handling of the Asian financial crisis
by its sister institution, the International Monetary Fund.
"There has never been any doubt on our part that the International
Monetary Fund has carried out this most difficult task with strength and
judgment," Wolfensohn said in a statement. "We support them and are
grateful for the irreplaceable role that they play."
He added that the World Bank is too busy with its mandate of working to
alleviate the consequences of the crisis - millions in Asia forced into
poverty and massive unemployment - to second-guess the IMF's
decisions. However, economists from the two multilateral institutions will
sometimes debate specific issues privately, he said.
Wolfensohn was responding to reports in The New York Times and The
Washington Post that said the World Bank's annual Global Economic
Prospects report, released Wednesday, amounted to blaming the IMF for
making Asia's financial crisis worse.
"This interpretation is false," Wolfensohn said.
The report warned there was a "substantial risk" of a world recession next
year but said the most likely outcome would be sluggish growth.
Without identifying the IMF by name, the report criticized the high interest
rate policy the fund recommended to Asian nations in 1997 when the
financial crisis erupted. The IMF said these rates were needed to prop up
the region's crippled currencies.
But Joseph Stiglitz, the bank's chief economist, said that didn't work and
just drove Asia deeper into recession. The IMF's two main economists,
Stanley Fischer and Michael Mussa, have disputed this view.
The Times quoted unidentified bank officials as saying the IMF's name was
left out of the report as a conciliatory gesture because of these
disagreements.
Located across the street from one another in Washington, the IMF and
the World Bank were founded in 1944. The IMF focuses mainly on
economic and monetary policy, while the bank deals with projects in
developing countries to help the poor fight poverty and disease. |
