Hi Barry,



What I see, is the more powerful institutions blaming the IMF for the perceived failures and/or actions of the other members of the Troika, and the EZ.



>>And if that is successful, *all the wrong conclusions* will be drawn from these episodes and the wrong medicine will be created and administered to the IMF -- which will make the next round of economic crises an even bigger debacle than the last round.<<



The IMF needs to put on it's big-boy pants and publicly announce the following:



1) The thinking of the global elite during the late stages of the financial crisis was that if Greece became insolvent the dominoes would begin to fall, triggering an unprecedented global depression. Therefore, *no matter what* had to be done in order to prevent that scenario.



Yes, they all held guns to each others heads and forced each other to sign onto *whatever it took* to save Greece. Making the responsibility for any blame, an equally-shared affair.



Trying to defer blame to the junior member is merely scapegoating and the IMF shouldn't accept that for ONE SECOND.



It was a joint decision to bail Greece out, exactly the way it was done, and it was agreed by all parties. Not one withheld their signature.



2) It worked! The most important metric in any equation is, 'Did it work?'



Why yes it did. Greece didn't fail and it didn't trigger a global financial meltdown by becoming the first domino *of many* to fall. That's a win.



As clumsy as some of it may appear in retrospect, the machine did the job it was created to do.



Making the IEO report of much lesser import.



(No offense to the IEO, I simply don't agree with them allowing themselves to be co-opted into this idea that the failures were the IMF's fault)



It worked, therefore, everything else is small potatoes.



3) I do agree that there are too many European heads in the IMF and that its worldview is primarily drawn from that brain trust.



That's a negative. The IMF should begin to 'widen-out' by hiring as many qualified non-Europeans as possible -- so that at least half of the IMF staff, at each pay grade, are non-Europeans.



Of course, there can be only one Executive Director.



But even Executive Directors should avail themselves of all points of view, and be seen to be considering the broadest possible range of views before making a final decision on a country.



4) The IMF should never find itself as the junior partner again.



It should always be the lender of first resort for nations when crisis approaches, no other lender should be working with or through, or above, the IMF.



For example: If the AIIB wants to work in a country that the IMF is involved in, that's to be expected -- and welcome. ('Let the AIIB build and finance hydro-electric dams, we'll work on the national economic plan/debt refinancing."



Just cut up the areas of responsibility so there's no overlap. Areas of responsibility could be quite different by country.



5) Each country that approaches the IMF for assistance should immediately be told by the IMF Executive Director, 'As soon as you install a 5% import tariff on every good that comes into your country, then you will be eligible for IMF assistance. But not until.'



That way, the IMF can see whether that developing nation has political control of that country, and really does represent the people there.



If they can't even institute a 5% tariff, then they aren't running the country -- the country is running the government. That's a bad loan just waiting to happen.



And not incidentally, that 5% tariff should be able to help offset payments to the IMF, particularly as it begins to accrue, in advance of any actual loan repayments to the IMF.



Thus, by one simple requirement, the IMF can ascertain if the country in question is stable, and IMF loan repayments are practically guaranteed via the tariff scheme.



The IMF might offer a 1% discount on the interest rate for countries that use the 5% tariff scheme -- even offering that discount to existing client nations, should they now institute the tariff scheme.



And all that tariff money can result in much faster loan payback/debt retirement -- allowing the IMF to reloan that money sooner than otherwise would have been the case, to other client-states.

_____



In summary, all of the PIIGS are saved, there was no domino-effect global meltdown, an uneven global economic recovery is underway, Greece is looking better these days, and the sky did not fall.



I'd have to say the IMF succeeded in it's mission during the global financial crisis, some parts of it may look ungainly, and the IMF's IEO is slightly too quick to accept IMF blame (by not looking at the larger picture) and the IMF needs to double the amount of money it has available to help nations in crisis.



In the meantime, the IMF should do two things; Take my well-meant suggestions seriously, and give themselves a pat on the back for helping to prevent a global recession.



See? Now isn't that better than playing the blamegame with Monday-morning quarterbacks?



Thank you again, Barry, for posting your well-written and informative essays here at ProSyn.



As always, very best regards, JBS