IMF and World Bank paint a bright future for Panama

Contributed by Sam Taliaferro - Panama Guide

It does not come as a surprise that the Multi-national banks are touting Panama's strong financial position as they are also committing billions of dollars to the canal expansion project. At a recent meeting in Washington, Augusto de la Torre, chief World Bank economist for Latin America and the Caribbean, predicted that Panama would stand out as the fastest growing country in Latin America in spite of the impact of the financial crisis. The only cautious statement was "Estimates by the two financial institutions varied somewhat by the magnitude of the impact the global financial slowdown would have on Central America, as well as the effect recessions within the economies of key trading partners may have on the local economy."

We often hear about these banking entities being involved in high level projects in various countries but we don't know much more than what is put out by their press releases or the news media. So what really are these world banks and what is their purpose? I found an article from this week put out by the Global Policy forum, who's stated mission is to monitor policy making at the United Nations, promote accountability of global decisions, educate and mobilize for global citizen participation, and advocate on vital issues of international peace and justice.

It is interesting to note that both these financial institutions came about In 1944, as the end of World War II was coming into view and in the aftermath of financial disorder following the Great Depression, the two Bretton Woods institutions, the World Bank and the International Monetary Fund (IMF), were created. Interestingly, in the next week Brenton Woods III will take place because a similar economic situation is facing the U.S.. The report shines an unflatering light on the organiszations their continued failure to follow their mandates.

Here are some interesting excerpts from the article:

Both institutions have also played havoc with the development process of many developing countries, pushing them deep into debt and economic decline for a number of years."

However, over the years, both institutions deviated significantly from their respective mandates to become politicized, over-ambitious and grasping all decision-making in countries that fell in dire need of their resources.

At the same time, the management of these institutions is dominated by the US, a handful of European countries and Japan. While the institutions preach good governance and management, they have been unable to adapt themselves.