« Europe's Debt Circle | Blog Home Page | What Just Happened in the Eurozone? »
November 30, 2011Is IMF Assistance to Italy Moral?
Matthew Lynn's doesn't think so:
According to calculations by the London office of the investment bank Daiwa, that amount of money would consume 64% of the IMF’s available resources. But Italy contributes just 3.1% of the IMF’s money. So just to get this clear, a country that chips in 3% of the money in the pot gets to take out 64% at the other end, roughly 20 times what it put in. Does that strike you as fair?Next, pause to think about some of the countries that are making the contributions.
Many of them are significantly poorer than Italy. According to the World Bank, Italy has a GDP per capita of slightly under $34,000. China contributes 6% of the IMF’s funding, but it has a GDP per capita of $4,393. India and Russia contribute 2.3% each, but they have GDP’s per capita of $1,447 and $10,440 respectively. Indonesia is nobody’s idea of a wealthy country (its GDP per capita is $2,946) but it pays 1% of the IMF funds so it will be subsidizing a country more than 10 times richer.
Share