Welcome

Website counter
website hit counter
website hit counters

Friday, November 11, 2011

Colonization to Globalization-5-IMF worse than Shylock

They broke their word:

 World Bank was charged with eradicating poverty and International Monetory Fund with global economic stability.

  WB keeps a few perssonel based in the countries. IMF has only one representative. For projects, both send teams to LDCs for three week missions.

One has to travel gain knowledge of the conditions on ground. Members of WB/IMF mission sit in five star hotels and pore over numbers.

In 1997 per capita income in Ethiopia was $ 110.00. Famine and drought killed two million people. P.M Menes Zenawi had fought for seventeen years against Marxist Menigistu Haile Marium and won in 1991. All IMF parameters were fulfilled, no inflation, growth 9%. Ethiopia had increased funding to villages and reduced military expenditure. It had concentrated development effort on 85% of the population. IMF did not like that. Ethiopians were building schools and health clinics and had flexible policies, but IMF could not see the logic.

Ethiopia, using its reserves, which was getting lower interest than it was paying on the IMF loan, had paid back some loans early.  IMF objected to the repayment without its approval. IMF standard operating procedure is neo-colonialism.

But IMF gives A grade to countries with double digit inflation, high unemployment but balanced budget. It suspended aid to Ethiopia. Other agencies followed IMF and suspended aid too.

IMF philosophy is that aid should not be spent but kept in reserve to pay foreign creditors.

Ethiopia's entire banking is smaller than that of Bethesda Maryland (population 55,000). IMF wanted Ethiopia to open its markets to giants like Citibank. To compete was impossible, the foreign banks squelch national banks and offer loans to MNCs rather than to local business. IMF demanded liberalization of finance markets to allow interest rate to be determined by the market, which Europe and US did not do till 1970s. US provided easy loans to agriculture. In Ethiopia the difference between lending and borrowing rate was lower than in many LDCs.

              Kenya followed IMF advice and saw fourteen banking failures in 1993-94. Interest rates went up and farmers could not borrow for seeds and fertilizers. Kenya is a rich land but rampant corruption plus IMF imposed high interest rate led to disaster.

In the USA, given wisdom is that inflation goes up if unemployment goes down below 6%, inflation would go up (it fell actually to 4%, inflation did not go up). IMF advised increase in interest rate; the Fed ignored it. Other countries can not do so.

IMF teaches that unemployed do not want to work; it was due to greedy unions and governments interfering with markets for high wages, so wage would not be lowered.

 

The depredations of IMF:

Botswana' per capita income is $100.00. Economy is agriculture based with scarce water resources and rudimentary infrastructure. Unlike the Congo, Nigeria and Sierra Leone, it used its diamonds resources wisely; from 1961 to1997 it had a growth rate of 7.5%. It talked to a variety of advisers including the Ford foundation. They held open sessions, unlike IMF which talked only to finance ministers.

Uganda produces coffee. The British kept the natives down. There were only two African master sergeants; one was Idi Amin.

IMF MD, Michael Camdessus (1998) publicly humiliated Indonesian president into handing over economic sovereignty for a badly needed loan, which was in fact used to bail out private sector foreign creditors. (Examples from history-Admiral Percy in Japan, opium wars in China and maharajahs of India and the British).

 In the 1997 South Asian crisis, IMF not only cut off funds to South Korea but also bullied other agencies to break off negotiations.

IMF monitors not only macroeconomic management but also money supply and forces country's parliament to change laws with in one to three months.

These requirements are called conditions of schedule of repayment. Each of the hundreds of condition, collectively called conditionalities, has its own rigid timetable. Loans are are released in installments, which are based on the steps taken for liberalization of the market. The net result is even worse economy. It generally reduces the likelihood of repayment of the loan leading to more control of IMF over the country.             

They turn a loan into a policy tool.

Going way beyond its charter, it asked South Korea to make its central bank independent of political process, which often led to downturn like the one in Europe in 2001. It did not allow lowering of interest rate needed to bring down unemployment (motive profit, not welfare.

IMF pushed political agenda in South Korea to ask Korean Central Bank to focus on inflation, which it did not have and forced it to move up the date of open markets to certain Japanese goods which could not possibly help the crisis.

IMF has the curious concept of Fungiblity. Money going in for one purpose frees up other money for other purpose with no impact on intended purpose. Money used for a commercial road frees funds for a road for the convenience of the elite. 

IMF behaves in an inconsistent manner. It halted loan to Kenya due to corruption, but continued it to Russia and Indonesia.

 Separation of economics from politics narrows the perspective and is not rational.

IMF writes a draft report before its team visits a country and only fine tunes it during a visit. It is 'Boiler plate'; whole paragraphs are borrowed from one to another country. Sometimes the name of the other country is left behind on the report (I had a personal experience of this kind of stupidity. I asked for a loan to build a hospital in Karachi. The lending agency asked for a feasibility report. I asked a consultant to draft a report and submitted it to the lending agency. One senior officer of the agency called me one afternoon. The report had a note of approval of the agency! I told him to keep his documents more securely and hung up).

In the IMF bars citizens from discussion and also not told what was in the agreements. It keeps secrets even from WB in joint missions; they are limited to a few in IMF and fewer in recipient countries.

LDCs have little voice in international economic institutions.

.          

 


Dr. S. Akhtar Ehtisham
(607) 776-3336
P.O. Box 469,
Bath NY 14810
USA
Blog syedehtisham.blogspot.com
All religions try to take over the establishment and if they fail, they collaborate with it, be it feudal or capitalist.

__._,_.___

No comments:

मैं नास्तिक क्यों हूं# Necessity of Atheism#!Genetics Bharat Teertha

হে মোর চিত্ত, Prey for Humanity!

मनुस्मृति नस्ली राजकाज राजनीति में OBC Trump Card और जयभीम कामरेड

Gorkhaland again?আত্মঘাতী বাঙালি আবার বিভাজন বিপর্যয়ের মুখোমুখি!

हिंदुत्व की राजनीति का मुकाबला हिंदुत्व की राजनीति से नहीं किया जा सकता।

In conversation with Palash Biswas

Palash Biswas On Unique Identity No1.mpg

Save the Universities!

RSS might replace Gandhi with Ambedkar on currency notes!

जैसे जर्मनी में सिर्फ हिटलर को बोलने की आजादी थी,आज सिर्फ मंकी बातों की आजादी है।

#BEEFGATEঅন্ধকার বৃত্তান্তঃ হত্যার রাজনীতি

अलविदा पत्रकारिता,अब कोई प्रतिक्रिया नहीं! पलाश विश्वास

ভালোবাসার মুখ,প্রতিবাদের মুখ মন্দাক্রান্তার পাশে আছি,যে মেয়েটি আজও লিখতে পারছেঃ আমাক ধর্ষণ করবে?

Palash Biswas on BAMCEF UNIFICATION!

THE HIMALAYAN TALK: PALASH BISWAS ON NEPALI SENTIMENT, GORKHALAND, KUMAON AND GARHWAL ETC.and BAMCEF UNIFICATION! Published on Mar 19, 2013 The Himalayan Voice Cambridge, Massachusetts United States of America

BAMCEF UNIFICATION CONFERENCE 7

Published on 10 Mar 2013 ALL INDIA BAMCEF UNIFICATION CONFERENCE HELD AT Dr.B. R. AMBEDKAR BHAVAN,DADAR,MUMBAI ON 2ND AND 3RD MARCH 2013. Mr.PALASH BISWAS (JOURNALIST -KOLKATA) DELIVERING HER SPEECH. http://www.youtube.com/watch?v=oLL-n6MrcoM http://youtu.be/oLL-n6MrcoM

Imminent Massive earthquake in the Himalayas

Palash Biswas on Citizenship Amendment Act

Mr. PALASH BISWAS DELIVERING SPEECH AT BAMCEF PROGRAM AT NAGPUR ON 17 & 18 SEPTEMBER 2003 Sub:- CITIZENSHIP AMENDMENT ACT 2003 http://youtu.be/zGDfsLzxTXo

Tweet Please

Related Posts Plugin for WordPress, Blogger...

THE HIMALAYAN TALK: PALASH BISWAS BLASTS INDIANS THAT CLAIM BUDDHA WAS BORN IN INDIA

THE HIMALAYAN TALK: INDIAN GOVERNMENT FOOD SECURITY PROGRAM RISKIER

http://youtu.be/NrcmNEjaN8c The government of India has announced food security program ahead of elections in 2014. We discussed the issue with Palash Biswas in Kolkata today. http://youtu.be/NrcmNEjaN8c Ahead of Elections, India's Cabinet Approves Food Security Program ______________________________________________________ By JIM YARDLEY http://india.blogs.nytimes.com/2013/07/04/indias-cabinet-passes-food-security-law/

THE HIMALAYAN TALK: PALASH BISWAS TALKS AGAINST CASTEIST HEGEMONY IN SOUTH ASIA

THE HIMALAYAN VOICE: PALASH BISWAS DISCUSSES RAM MANDIR

Published on 10 Apr 2013 Palash Biswas spoke to us from Kolkota and shared his views on Visho Hindu Parashid's programme from tomorrow ( April 11, 2013) to build Ram Mandir in disputed Ayodhya. http://www.youtube.com/watch?v=77cZuBunAGk

THE HIMALAYAN TALK: PALASH BISWAS LASHES OUT KATHMANDU INT'L 'MULVASI' CONFERENCE

अहिले भर्खर कोलकता भारतमा हामीले पलाश विश्वाससंग काठमाडौँमा आज भै रहेको अन्तर्राष्ट्रिय मूलवासी सम्मेलनको बारेमा कुराकानी गर्यौ । उहाले भन्नु भयो सो सम्मेलन 'नेपालको आदिवासी जनजातिहरुको आन्दोलनलाई कम्जोर बनाउने षडयन्त्र हो।' http://youtu.be/j8GXlmSBbbk

THE HIMALAYAN DISASTER: TRANSNATIONAL DISASTER MANAGEMENT MECHANISM A MUST

We talked with Palash Biswas, an editor for Indian Express in Kolkata today also. He urged that there must a transnational disaster management mechanism to avert such scale disaster in the Himalayas. http://youtu.be/7IzWUpRECJM

THE HIMALAYAN TALK: PALASH BISWAS CRITICAL OF BAMCEF LEADERSHIP

[Palash Biswas, one of the BAMCEF leaders and editors for Indian Express spoke to us from Kolkata today and criticized BAMCEF leadership in New Delhi, which according to him, is messing up with Nepalese indigenous peoples also. He also flayed MP Jay Narayan Prasad Nishad, who recently offered a Puja in his New Delhi home for Narendra Modi's victory in 2014.]

THE HIMALAYAN TALK: PALASH BISWAS CRITICIZES GOVT FOR WORLD`S BIGGEST BLACK OUT

THE HIMALAYAN TALK: PALASH BISWAS CRITICIZES GOVT FOR WORLD`S BIGGEST BLACK OUT

THE HIMALAYAN TALK: PALSH BISWAS FLAYS SOUTH ASIAN GOVERNM

Palash Biswas, lashed out those 1% people in the government in New Delhi for failure of delivery and creating hosts of problems everywhere in South Asia. http://youtu.be/lD2_V7CB2Is

THE HIMALAYAN TALK: PALASH BISWAS LASHES OUT KATHMANDU INT'L 'MULVASI' CONFERENCE

अहिले भर्खर कोलकता भारतमा हामीले पलाश विश्वाससंग काठमाडौँमा आज भै रहेको अन्तर्राष्ट्रिय मूलवासी सम्मेलनको बारेमा कुराकानी गर्यौ । उहाले भन्नु भयो सो सम्मेलन 'नेपालको आदिवासी जनजातिहरुको आन्दोलनलाई कम्जोर बनाउने षडयन्त्र हो।' http://youtu.be/j8GXlmSBbbk