Tuesday, April 28, 2009

Ecuador and the IMF

An interesting development is Ecuador's quiet discussion with the IMF about obtaining loans. Of course, the IMF has long been vilified for its role in economic shock therapy that made no allowances for local realities and needlessly forced many Latin Americans to suffer as a result. But especially in the context of the current economic crisis, however, it has been claiming that its policies are different, that they respect safety nets and are generally more consensual.

Rafael Correa had cut ties with the IMF in 2007, but now the drop in the price of oil is starting to hurt, and remittances are also decreasing. He needs to get money from somewhere. He certainly would not take loans with conditions and recently said that it would be "a very serious error to resuscitate the IMF" so if he works out a deal with the IMF, then something is indeed changing.

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