A Second Chance for Brazil and the I.M.F.

In this opinion piece, former World Bank economist Joseph Stiglitz writes that the success—or failure—of the I.M.F. rescue package announced this past weekend will likely settle the fate of I.M.F., Brazil, and the rest of Latin America. The I.M.F.’s loan history is making many question the Fund’s latest package; a closer look at Brazil, however, may brighten one’s outlook. Sound monetary and fiscal policy, strong research institutions, and sensible government crisis-handling have all made the time favorable for the I.M.F loan to serve its purpose. This rescue package is also unique: it does not require Brazil to tighten government spending, only to keep a healthy budget surplus of 3.75%. With Argentina’s economic collapse, Latin Americans are worried about the effectiveness of the loan and how their economies will respond. Brazil’s future may not, as some predict, be so bleak after all. - YaleGlobal