IMF forecast

THE International Monetary Fund (IMF) in its publication titled the World Economic Outlook made a dire prognosis: 'the world economy is now entering a major downturn in the face of the most dangerous shock in mature financial markets since the 1930s'. At the time of the actual drafting of this report and prior to its publication world recession as a prognosis was considered within the realm of a possibility but not a certainty as is now being feared by several governments with the deepening of the banking crisis in the West with the take-over of Iceland's largest bank by the government. Be that as it may, the West has so far ignored the IMF's prognosis or indeed prescriptions for the simple reason that the organisation's capacity is considered sorely deficient in the light of its performance in the 1979 Asian financial crisis; an assessment whose validity was conceded by the IMF Managing Director when he called upon its Board of Directors, comprised of member countries with a voting strength based on their shareholdings, to consider strengthening the skills mix of the Fund as well as its terms of reference to enable it to more effectively deal with a global crisis. The IMF also does not have adequate resources at its disposal to tackle a global crisis, yet the IMF chief has announced the activation of its emergency financing mechanism for the emerging economies, last used during the Asian financial crisis. There was, however, nothing earth shattering about the statements or prescriptions emanating from the IMF report or the subsequent press conference with IMF's Chief Economist, Olivier Blachard who deemed it prudent to add an obvious rider, "if the right policies are in place then the probability of a Great Depression is extremely small." What exactly these right policies should consist of is by now fairly well established by public and private analysts through the media.
They underline the need to take joint action - a move now being forced on reluctant European governments by their markets. The World Bank President, Robert Zoellick, called for the establishment of a multilateral body, instead of a meeting of the exclusive Group of Seven most industrialised countries of the world, which would have greater capacity to deal more effectively with a global financial crisis. This was also supported by US Treasury Secretary Paulson who has proposed a meeting of G-20, including the emerging economies that are also hard hit by the financial crisis and who have cautioned that there is need to "take care to ensure that our actions are closely co-ordinated and communicated so that the action of one country does not come at the expense or the stability of the system as a whole". And, equally importantly, another prescription to resolve the crisis is to regulate the financial system with clearly defined limits on the incentives package of CEOs as desired by the general public referred to as Main Street. In contrast what is, however, more significant is that IMF analyses and prescriptions continue to have great applicability to the poor indebted countries. Pakistan is not an exception. Interestingly, Chief Economist Blanchard stated that the IMF had first believed that the developing economies could largely steer clear of any painful spillover from the credit mess, but no longer. There is simply too much evidence to suggest otherwise.

The rule of law in Guantanamo

THE Bush administration must not be allowed to quietly ship the Uighurs now detained at Guantanamo Bay to one of these remote countries, said The New York Times in an editorial yesterday. Excerpts: A federal judge in Washington has struck an important blow for the rule of law by ordering that 17 detainees be freed from Guantanamo Bay. But the Bush administration is fighting the ruling to avoid having the case become an open window into the outlaw world of President Bush’s detention camps. The detainees are members of the Uighur Muslim minority of China, which is violently oppressed by the Beijing government. They were swept up in Pakistan after the American invasion of Afghanistan and thrown into indefinite detention as “illegal enemy combatants.” They are not enemy combatants, legal or illegal, nor are they terrorists. Their detention — along with the detention of others held at Guantanamo without charges or real hearings — has gravely injured the nation’s tradition of due process and its international standing. The Bush administration admitted long ago that the 17 Uighur detainees were not a threat to this country, but it would not allow them into the United States. Instead, Washington began asking other countries, mostly in Europe, to give the detainees asylum from China, which was demanding their return. The administration must not be allowed to do that. The appellate court should affirm Judge Urbina’s ruling and allow the detainees into the United States. The government’s counterproposal — if the Uighurs cannot go somewhere else, they should stay at Guantanamo — is more absurd than its other arguments. The administration is not afraid the Uighurs will take to the streets against the United States government. It is afraid they will take to the microphones.
“Shine the light of constitutionality” on the Bush administration’s detention camps. They need the light. The Bush administration told the countries it was trying to persuade to take the detainees that they posed no threat. It has stipulated in court documents that they are not a threat. But after Judge Urbina’s ruling, the government suddenly claimed the 17 men were a threat, and managed to obtain a stay of the judge’s order from the federal appeals court in Washington. Meanwhile, Washington is still trying to find a country to take the Uighurs — assuring those nations, no doubt, that they are no threat. The search is reportedly focused on countries that recognize Taiwan and thus are less worried about offending China — a list that includes Burkina Faso, Belize, Nauru, Palau, Tuvalu and the Marshall Islands. Some human rights advocates suspect the administration sought the injunction to buy time to quietly ship the Uighurs to one of these remote countries. The administration must not be allowed to do that. The appellate court should affirm Judge Urbina’s ruling and allow the detainees into the United States. The government’s counterproposal — if the Uighurs cannot go somewhere else, they should stay at Guantanamo — is more absurd than its other arguments. The administration is not afraid the Uighurs will take to the streets against the United States government. It is afraid they will take to the microphones.

—Arab News