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To: Rarebird who wrote (49758)	2/28/2000 1:05:00 PM
From: long-gone	Respond to of 116785

Well well, there may be far fewer bail-ups: Monday February 28 11:35 AM ET Congress Seeks IMF, World Bank Curbs By Janet Guttsman WASHINGTON (Reuters) - A U.S. Congress report to be released within the next few weeks recommends drastic curbs in the roles of the World Bank and International Monetary Fund, and says the money saved should be given back to member states. The highly critical draft report, obtained by Reuters on Monday, seeks major shake-ups in both institutions, limiting World Bank lending to poor countries that cannot raise money on the private sector and changing the IMF's lending rules. Some ``minor revisions' are likely before publication and members of the panel are expected to add dissenting views, says the paper, which was written by a bipartisan Congressional commission of lawmakers and economists chaired by Carnegie Mellon University professor Allan Meltzer. ``The IMF has given too little attention to improving financial structures in developing countries and too much to expensive rescue operations. Its system of short-term crisis management is too costly, its responses too slow, its advice often incorrect and its efforts to influence policy and practice too intrusive,' the document said. ``High cost and low effectiveness characterizes many development bank operations also. Evaluation of the World Bank's performance in Africa found a 75 percent failure rate. Only one of four programs achieved satisfactory, sustainable results.' The report is part of a review initiated when Congress, after a long and bitter debate, approved the U.S. share of increased quotas at the IMF in 1998. Many in Congress are vehemently opposed to the IMF, arguing that its policies make financial crises worse, or that they neglect workers rights. The World Bank has also come in for Congressional criticism, albeit somewhat more muted. The report, in proposals drawing on research from two conservative members, seeks a smaller IMF which could provide short-term loans at ``a penalty rate' -- a higher interest rate than the country would have paid if it tapped capital markets a week before crisis struck. It would scrap most of the IMF's existing lending windows, including the longer-term credits which have provided a seal of international approval about the economic policies of IMF member states. ``The commission's proposals would make the IMF a standby lender. Lending would decline, so fewer resources would be required. Most of the cash portion of members' quotas should be returned to member states,' the report said. Curb Lending The commission said the World Bank should stop lending to countries with access to international credit markets or with per capita income of more than $4,000 a year. Loans to Asia and Latin America should be handled by regional development (cont) dailynews.yahoo.com