Never-resolvable macroeconomic vulnerability. Is IMF the solution? You judge.
Article's background and purpose Economies of many developing countries have evolved on the US Dollar as the reserve currency under the Bretton Woods system and IMF/World Bank surveillance. As a result, sovereign currencies have been managed largely tied to the dollar where respective economies have become highly dollarized through imports and foreign borrowing by the governments. In this background, country leaders have got an easy habit of building a dollar reserve funded by foreign borrowing to show the country's economic strength and attract foreign borrowing inclusive of hot capital. As a result, country economies have become increasingly vulnerable to dollar flows where currency shocks and crises have become a way of living in these countries. A recent article published in the NationNews website, Barbados, on 25 February, authored by Marla Dukharan, has produced a simple diagnosis on the macroeconomic vulnerability confronted by Caribbean countries due to exces...