Questioning the IMF Chief's Discourse, Asking Development's Fundamentals

It's really interesting how IMF discourse appears to have changed in recent years. In a TV interview during her visit in the Philippines, IMF Chief Christine Lagarde looks to a more vibrant Asia which she refers to as "a shift in economic history" in the global economy from US-EU to Asia in the next two decades. However, the IMF should be reminded that Asia has become, or is becoming, a success story either through the economic strategies that are 'wrong' in the eyes of the IMF or through the lessons drawn from the decades-long hardships we've had experienced being indebted to the IMF and subjected to its conditionalities.

Lagarde said that "the IMF needs the Philippines rather than the other way around"; that the IMF is providing technical assistance to the government for efficient revenue systems through the use of IT in tax collection system; that there's need for institution and capacity building; that inequality needs to be tackled so as to be conducive to a more sustainable growth. Lagarde also pointed out that what the Philippines is doing right is the agenda to "grow the middle class which keeps economies sustainable". Lagarde then proposed that we keep the focus on education, health, pension schemes, unemployment insurance, minimum wage, women empowerment, and the CCT, which is to be regarded as "financial safety net to help people move up the ladder". 

These all sound so good indeed. But the fundamentals of development strategy are not being asked, nor are they being categorically stated by the IMF Chief. How to address inequality? How to broaden the tax base of the government? How social services of education, health, pension, and unemployment insurance are to be financed? Why only "minimum wage" and not "living wage"? Why the need for "financial safety net" if "inclusive" or "sustainable" growth should mean that all must benefit from a growing economy in a synergetic way?

The IMF (together with the World Bank and the ADB) may be using progressive-sounding discourses these days, but we should continue asking them about the fundamentals of their development strategy and the telos of their economic policies. Still, they promote a type of (exchange-based, finance-led) capitalism that cannot increase living standards of tens of millions of Filipinos, incomes of the workers, earnings of businesses, and revenues for the government. We need to have a production-based development strategy to establish a socio-economic condition which eliminates poverty and inequality and hence enlarges the middle class in a truly middle-income country whose people have the means, rights, and access to social entitlements. As always, it's the question of the mode of production — i.e., how to create wealth for the nation — that is the  prerequisite for redistributive justice and that is the crux of economic development.