IMF Managing Director Dominique Strauss-Kahn gave a speech in Lima, and tries to get some IMF credit for keeping up social spending in Latin America during the recession.
But during this recession, many countries preserved basic social spending and social safety nets. “This is something the IMF pushed for in country programs. I think it was incredibly important. Not only did it protect the most vulnerable from the ravages of the crisis, but it also contributed to social and political stability,” Strauss-Kahn said.
Today's IMF is not the IMF of the 1980s and 1990s, when social spending was seen almost as anathema, but this is still a bit hard to swallow. It makes it sound like governments preferred to cut spending, but were finally convinced by the IMF to do the right thing.