On
Middle
East As On
Subprime, IMF
Puts Its Head
in the Sand
By
Matthew
Russell Lee
UNITED
NATIONS,
April 2 -- As
the
International
Monetary Fund
releases its
review of
Israel
including its
financial
stability, the
narrowing
scope of its
analysis come
into focus.
Here is what
the IMF says
on
geopolitical
risk:
"The
economy
survived well
past episodes
of conflict,
but ongoing
regional
turmoil could
have a more
severe impact,
especially if
of long
duration and
associated
with a large
increase in
energy prices,
inflation, and
a reaction of
much higher
real interest
rates around
the globe."
While
the above is
true of many
countries, the
impact of the
"ongoing
turmoil"
in Syria would
surely impact
Israel's
financial
stability more
than
most, as would
its relations
with Iran.
The
IMF, though
ostensibly
part of the UN
system, goes
out of its way
to claim that
its reviews
are strictly
financial. For
example, while
Sri Lanka
engaged in the
killing of
civilians
criticized
last month in
the UN
Human Rights
Council, the
IMF declined
to make any
connection to
the
"program" it
offered to the
Rajapaksa
government.
More
recently,
even as Sri
Lanka's
defense
spending
continued to
increase even
after
its bloody
victory in
Northern and
Eastern Sri
Lanka, the IMF
has
backed away
from its own
previous
statements,
and cooked the
numbers
to emphasize a
decrease in
military
spending as a
percentage of
overall
spending.
Finance
and
lending cannot
credibly be so
divorced from
political
factors. In
Egypt, the IMF
is considering
binding the
country to a
multi-billion
dollar loan it
is negotiating
with an
unelected
military
government
soon, it
seems, to be
replaced. What
are Ms.
Lagarde's
answers to
these
questions?
We've yet to
hear them.
Footnotes:
The
IMF report on
Israel lists,
as a
participating
outside
"expert,"
Thierry Bayle
of the Banque
de France.
Mais pourquoi?
The IMF drops,
as a footnote,
that one bank
in Israel lost
a lot of money
on US
subprime
mortgage
backed
securities. As
to the
fairness of
subprime
or predatory
lending, the
IMF has had
near nothing
to say.
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