The Global Economy in Turbulent Times

CHAPTER 8 IMF Meet, Fall 2010: A Cop-Out¹

Maybe I am getting old. For 20 years since the early 1960s, I was a regular at the annual meetings of the International Monetary Fund (IMF). In those days, the annual meetings were eagerly awaited and exciting—serious systemic international monetary issues were usually taken up and resolved in corridors outside the main meeting. While concrete action was definitely lacking, the just-concluded mid-October meetings showcased the growing influence of emerging nations, who were on the verge of winning a greater share of IMF governance power. The flocking of a record number of private bankers and fund managers to gain insights from (and access to) policy makers from Asia, Africa, and Latin America offered the main excitement—a further testament to the growing importance of emerging markets where generous returns have drawn (and continue to draw) an uncomfortably heavy flow of investment monies from the United States and Europe. The mood was absorbing. But I sense the common thread was countries pursuing a national agenda in a fruitless effort to resolve major global problems. It is clear that no nation is really ready to act for the greater global good. So what else is new?

The main issue on the table was currencies—two to be precise: the US$ (US dollar) and the RMB (renminbi) or yuan. The US$ because it is deemed to be deliberately made too weak; and the RMB because it is deliberately managed too inflexibly (despite breaking away from its ...