Rethinking Bretton Woods | Mon, Jun 20, 2005
Published in The Financial Times June 11 2005
From Mr Aldo Caliari.
Sir, The US government's restated support for 100 per cent multilateral debt cancellation ("Agreement on African debt relief in sight as Bush pledges extra resources", June 8) should certainly be welcome. However, in this context, President Bush's recent assertion that "we're not interested in supporting a government that doesn't have open economies and open markets" becomes all the more unfortunate.
For it shows so much goodwill will be wasted because of an ideological attachment to a model that empirical (and an increasing number of theoretical) analyses show as seriously flawed in terms of both promoting growth and reducing income inequality.
President Bush's position stands in great contrast to the UK Overseas Development Agency, which recently called for an end to policy-based conditionality in the multilateral financial institutions. The Commission for Africa report also recognised the harmful effects of, specifically, conditions related to trade liberalisation and recommended their withdrawal.
In trying to assert its leadership on the debt cancellation question the US government has gone to great lengths. One would have hoped the government would have also wanted to be seen as the first, not the last, to withdraw its support for an economic model that has failed to promote growth in the developing world and, crucially, the poorest countries in need for debt relief. Clearly, this will not be the case at the Group of Eight summit at Gleneagles in Scotland next month.
Aldo Caliari, Director
Rethinking Bretton Woods Project
Center of Concern
Washington, DC 20017, US