Fischer’s Time at the Fund Coincided With Disastrous Financial and Economic Crises
For Immediate Release: June 13, 2011
Contact: Dan Beeton, 202-239-1460
Washington, D.C.- An appointment of Stanley Fischer to head the International Monetary Fund (IMF) would “institutionalize lack of accountability” at the Washington-based institution, Center for Economic and Policy Research (CEPR) Co-Director Mark Weisbrot said. Fischer announced his candidacy on Saturday, and in a Wall Street Journal interview attempted to set himself apart from front-runner Christine Lagarde by emphasizing his credentials as an economist and hinting that Lagarde would not be sufficiently qualified because she is not an economist.
“Fischer’s statement that the IMF needs someone with economic training is not a good advertisement for the economics profession, considering what happened on his watch,” Weisbrot said. “Some of the IMF’s worst economic mistakes in its history occurred while Fischer was there.”
Fischer’s time at the IMF coincided with a number of serious financial and economic crises in Southeast Asia, Russia, Argentina, Brazil, and Mexico’s “tequila” crisis, among others. Fischer was First Deputy Managing Director of the IMF from September 1994 to August 2001 and Special Adviser to the Managing Director from September 1, 2001 until January 31, 2002.
Weisbrot noted that the IMF’s intervention in the Asian economic crisis made things worse, as even its own Independent Evaluation Office later noted. The IMF’s role in Argentina was even worse, prescribing policies that prolonged and deepened the country’s worst recession from 1998-2002. The IMF’s intervention in Russia during Fischer’s tenure led to one of the worst losses in output in history, in the absence of a war or natural disaster. In both the Russian and Argentine cases, the economies grew very rapidly post-1998 for the next decade (63 percent over six years in Argentina and 94 percent over the decade in Russia), after they had rid their countries of the IMF and its policy prescriptions.
“What makes this history even more relevant is that the IMF, together with the European authorities, is currently promoting the same policies that destroyed the Argentine economy under Fischer’s watch, in countries such as Greece, Ireland, Spain, Portugal, and Latvia.”