THE HIMALAYAN TALK: PALASH BISWAS BLASTS INDIANS THAT CLAIM BUDDHA WAS BORN IN INDIA
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.
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.
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
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.
For severe downturns the policy for seven decades has been to stimulate demand, lower taxes, loosen monetary policy. IMF pushed the opposite.
No responsible economist has argued that focus should be on actual deficit rather than on structural deficit (deficit if economy had been operating on full employment). IMF did just that. They asked for balanced budget. An economy going into recession should not have a balanced budget. The IMF and Treasury advocated balanced budget in East Asia, forcing economies to collapse (to let capitalists acquire assets on the cheap).-77 Stiglitz
It resulted in massive economic downturn, cutting income and reducing imports, which led to surpluses to pay back foreign creditors, which was obviously the whole purpose of the exercise.
Clinton worried about interest raise of ¼ and ½ % by Alan Greenspan that it will dampen economy and lose jobs. In East Asia IMF forced raise of interest by 25% and asked to raise it even more-(13)-77. IMF made small business men pay for real estate speculator's sins.
In Indonesia 75% of the business was in debt, in Thailand 50%; bank loans were non-performing. In 1997 Japan offered $ 100 billion to create Asia Monetary fund. IMF and Treasury fought it as they did not want competition; and loss of US leadership and control (14)-78. Japan offered Indonesia $ thirty billion. The Treasury accepted, but insisted it be used to bail out foreign creditors, and not for stimulating economy. Asian countries, three years after the crisis quietly began developing a modest version of the Asian monetary fund-the Chang Mai initiative after the city in Thailand where it was initiated.
If the problem of bad banking is ignored, eventual cost to tax payers is too high (200 billion in S&L and trillions in 2008)
Capital to outstanding loans/assets is called Capital Adequacy Ratio. IMF ignored the importance of keeping credit running, in stead insisted on all banks meeting the ratio immediately. If one bank has this problem, one can insist that it comply. If many or all banks have the problem, insistence is disastrous.
There are only two ways of increasing the ratio between capital and loans; increase capital or reduce loans. It is hard to raise capital during a crisis.
Nowhere is IMF stupidity exhibited more than in closing Indonesian banks-sixteen were closed down, others given notice. Depositors were left out high and dry. There was drain on deposits on the remaining banks with disastrous consequences.Mistakes of fiscal and monetary policy were compounded.
Corporate sector in Indonesia and Thailand was in paralysed and on the verge of bankruptcy. No body knew who were the owners or creditors. Owners stripped assets. In DC trustees are appointed. No such mechanism existed in East Asia.
SK ignored advice, recapitalized banks and recovered relatively more quickly.
IMF insisted on selling assets, functioned as the enforcer of MNCs, selling chips in SK and bringing in foreign management. SK and Malaysian governments intervened and finished the job in two years. Thai followed IMF and it went on forever.
East Asian crisis took longer to recover due to IMF mistakes. When job loss and real wages have bottomed out, crisis is not over, as it is on Wall Steet once stock prices go up. No recovery can be claimed till workers return to jobs and wages rise to pre-crisis level. Incomes remained 20% lower for a long time.
In Mexico IMF declared crisis over as soon as foreign creditors started getting repaid (Bush Mission accomplished in Iraq).
Malaysia, China, India:
Malaysia's strong regulatory stance prevented banks from foreign exchange volatility, though high (15%) non-performing loans hit central banks. It made banks keep provision to cover these. IMF staffers found it difficult to support its MD's assertion that its banks were weak.
In 9/98 P.M Mahatir pegged the currency 3.8 Ringgit to a $, lowered interest and ordered all off shore Ringgit back with in a month, limited transfer out of the capital, and imposed one year freeze on foreign portfolio capital.
Paul Krugman advised Mahatir to impose capital controls. IMF and US treasury predicted collapse.In fact the reverse happened. WB worked with Malaysia to convert capital control to an exit tax.
Malaysia was able to remove the tax as promised in a year and in the period restructured Banks/corporations proving free capital marketers wrong (15). Foreign investment in Malaysia actually increased (16-79)
China and India escaped the vagaries of the global economic crisis. Both had capital controls. India grew 5%, China 8%. Liberal markets declined.
China adopted expansionary policy and invested in infra-structure. It recognized links between economy and social-political stability and aware of links macro stability and its micro economy.
South Korea took active role in restructuring corporations, ignored advice on micro chips and did well.
Little new money is raised by selling shares (new equity); only the UK, the USA and Japan with strong shareholder protection do it. Firms have to rely on loans, which is a risky move, even more so if it is from IMF; so borrow less, and grow less, have less efficient resource allocation, especially capital allocation.
Sales are managed by the very people who had pulled money out (local mangers often former employees of MNCs like Shaukat Aziz) make fat commissions as they had when directing money in-80 Pakistan Steel Mill.
Yeltsin sells Russia:
For the majority in Russia, life under capitalism got much worse than even what communist leaders had predicted. Middle class has been devastated and crony mafia capitalism has been created. Under the so called democracy, free media was shut down. US treasury and IMF preached market fundamentalism in stead of communism. (1-81).
Poverty increased. It will take years to repair damage of Yeltsin time.
Never has a country gone from government controlled economy to market economy as fast as Russia did in 1990s.
China started transition in1970s but is still far from full market economy.
Taiwan, a hundred miles offshore to China, was a Japanese colony since the end of 19th CCE, had one of the most successful transitions because of land reforms, partial privatization of industry and creation a market economy.
Production in the USA in 1947 was 9.6% higher than in 1944. At the time of the end of the war 37% of the GDP was going to the war; it was brought to 7.4% by 1947.
The difference between the US and Russia was that in the US market was in place before the war. Russia required their creation.
Market fundamentalists who advised Russia not only did not pay attention to painless transition in China and Taiwan but also ignored the advice of Russian scholarship.
Russian banks did not decide who got loans or if they got repaid. Enterprises were told what to produce and managers indulged in trades to fulfill quotas. This corruption increased with markets (3-82).
In Soviet times, farmers were given seeds and fertilizer, tractors and market was created. There was no unemployment; people worked in the same place their entire life and were given housing and pension. Post Soviet labor could move but there was no housing any more. The move to market driven privatization created a new type of market entrepreneurs
Economic failure led to corruption (83). IMF/US treasury replaced government monopoly with private monopoly which was worse.
Russia had high literacy, especially technologic; it had been the first into space. Incentive of profit was lacking. Huge subsidies caused economic distortion. Privatization and decentralization plus reduced military spending should have caused a burst of economic growth.
But the standard of living fell.
In 1992 prices were freed over night. That led to inflation. Savings were wiped out and the natural consequence was macro-instability. Interest rates were raised to deflate. But the price of natural resources was kept low for global corporations to rake billions in. No new investment came; jobs were cut.
GDP went down by 45%; greater than during WW II. Industrial product from 1940 to 1946 went down 24%. From 1990to 1998 it went down 42.9%. Livestock went down by half; investment in industry zero. Seven oligarchs got away with hundreds of billions.
Privatization was giving away state property to friends and taking kick-backs.
IMF had learnt from initial mistakes and repeated them. The sabotage was deliberate.
East Asian crisis had sent interest rates up. Oil prices went down by 40% in the first half of 1998. It actually came to below the cost of extraction and transport. Russia was under heavy debt.
Ruble was overvalued; it drove exports down. Unemployment was disguised by the number of people on the payroll who got no salary. Overvalued Ruble was a boon for the rich; they had to spend fewer of them for luxuries. Outflow of money helped too, they got more dollars for rubles. IMF resisted devaluation and was willing to pour billions in stead.
With devaluation imminent, interest rate went up and money fled. The government had to pay 60% interest on its Ruble loan in 6/1998. It went up to 150% a few weeks later. Dollar debt interest was 50% (in US interest was 5%). NY banks pushed loans on Russia in anticipation of IMF bail out (as usurers do in India) and in 7/98 pushed Russia into borrowing more foreign currency (4-84).
In 7/20/97 IMF gave $11.20 billion as part of 22.6 billion package; 4.8 billion were used to prop up the Ruble and failed. Loans also delayed reforms like collection of taxes from oil companies. Clinton pushed WB to give six billion. Bank gave that in 300 million installments.
Rescue failed. Three weeks after the loan of 8/17/98, Russia suspended re-payment and devalued. Ruble crashed. By 1/99 it was down by 75% from the 7/98 level. Global crisis caused increase in interest rate. That resulted in credit crunch. Brazil's recession deepened; other Latin American countries were driven to the brink. US Fed bailed out the largest hedge fund 'Long Term Capital Management'.
Oligarchs bled money out of the countries in hours. IMF could have made life easier if it had simply sent money directly to their Swiss and Cypriot banks. Cost of IMF blunders was paid by Russians.
Gap between "expectations and reality" was never wider. It failed in all transitions (Russia's 2000 GDP two thirds of 1989, Moldavia's less than one third, Ukraine's one third according to WB statistics).
. After Russia's wild ride from communism to capitalism was (dubbed sale of the century) it went from an industrial giant to oil exporter like Saudi Arabia (8-85).
In 1989 only 2% lived in poverty-2$ a day); in late1998 it was 23.8% (40% lived on less than 4$, 50% of the children lived in poor families (10-86).
Communism had avoided extreme poverty; living standards were relatively equal. Free health and education child care were offered. After the free market inequality was comparable to Latin America (11-87).
Privatization with out corporate governance leads to corporate theft. Yeltsin cronies became billionaires. Government turned to private banks; friends of government were given license to print money. Government assets were offered as collateral. Government defaulted; banks took over (11a-88).
Oligarchs worked for Yeltsin re-election.
In Kazakhstan there were numerous greenhouses with out glass. There was so little confidence in the future; they took what they could and ran.
Oligarchic mafia, all creations of IMF, stole right and left.
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.