A Third World Economic "Bad Habit"
Littered across the globe, we see a troubling collection of "developing economies" which stand today as a grisly reminder of Friedman style economic development. The scenario repeats itself on practically every continent (not Antarctica, so far). Awash in the wake of Friedman economics, each case is equally tragic.
MeanMesa has its own view of "just what happened."
From the Presidential palaces strewn about in all these now forlorn "victim states," the view a decade ago was clear enough. The developed world was revelling in its economic success with every feature of a healthy economy, a satisfied population and a bright future.
However, things at home were not so bright. Even in countries which were showing a strong foundation for a metered sort of development in the near future, conditions remained so harsh that the population was anything but satisfied.
Worse, the current "warlord in charge," being a "President" or simply an undocumented strong man, had developed his own appetite for the rewards of development. The Cold War had introduced "incentive assistance," but the fruit of such agreements was usually directed at the military -- an expensive military. With a national economy unable to finance the paving of roads, all those jet fighters gradually became an impossible luxury.
This left the "head man's appetite" facing a rather meagre menu once the super combatants quit injecting war dollars -- or rubles. There were always a few bucks for international aid, but most of that came with strings. What was left was an autocrat surrounded by a few loyal, but stingy local oligarchs and a dwindling budget.
The icing on the cake was a country full of citizens wondering why things never seemed to get better. All those unwashed locals -- who could see the aid dollars arriving but never getting past the local oligarchs -- wanted services. A few programs were trotted out as a meagre palliative. These became popular and the locals began to ask for more.
In no time, the government services has increased to an unsustainable level, that is, unsustainable as they negotiated a budget where almost all of everything still had to go to the top. For whatever really bad reason, the clutch of wealthy "own everythings" appealed to the "experts" in the US to help make sense out of the mess and to the IMF to figure out some sort of "loan" to finance it.
In rolled folks such as the now famous Dominique Strauss-Kahn, or, as he is lovingly called in the American press with a long tradition of disliking people with hyphenated names, DSK. The IMF had a "cookie cutter" approach to solving such economic difficulties. That secret recipe was the Friedman Economic Model.
The Friedman/IMF Country Saving Plan
Step one was to "loan" the troubled country what it needed to keep going, that is, to "keep going" with consistently less and less of the "services" which had "caused the trouble" in the first place. But, loans had to be repaid.
So, step two was to a.) impose a national austerity program beyond any proportion to the actual problem, and b.) lay out an essentially military regime to nationalize everything, that is, every nut and every bolt, every feather and every whistle, of the country's economy. The "ownership" of all this newly nationalized stuff would be "split" between the local oligarchs and the IMF Loan Repayment Bureau.
DSK was famous for arranging some wonderful ratios in the "splits."
The IMF had roamed far an wide through African and Latin American states in the 80's and 90's, almost always leaving the predictable debris of Freidman planning in their wake. In more recent decades the IMF has "engineered" the "austerity" programs for "news covered" places such as Egypt, Greece, Ireland and Portugal.
The resulting street riots are apparently acceptable collateral damage when viewed from the "cloud city" of IMF headquarters. (The story is told that all these greedy poor people and workers in the street had "sucked the country dry." Actually, all the "missing" money could generally be found in the pockets of the local oligarchs.)
Let's just say that this long, grisly list of IMF actions -- most recently led by DSK -- amounted to little more than international "gang rape." For any MeanMesa visitor who suspects such psycho-sexual hyperbole to be an exaggeration, Google away.
Well, now the lip licking "captain" of the "rape squad" has apparently shown his true colors.
From Common Dreams
Published on Monday, May 16, 2011 by The Progressive
I don’t like using the word rape as a metaphor, but the charge against the head of the International Monetary Fund is almost a perfect metaphor for the IMF’s role in the world.
IMF chief Dominique Strauss-Kahn is accused of attempted rape against an African maid in a luxury hotel in New York City.
And while the truth of this allegation remains for the legal system to sort out, screwing helpless people over in the Third World (and Eastern Europe: see Naomi Klein’s “The Shock Doctrine”) is what the IMF is all about.
For decades now, the International Monetary Fund — this instrument of the U.S. Treasury and global capitalism — has required developing countries that are in financial trouble to devalue their currency, slash employment in the public sector, and slash government subsidies for such essentials as food and fuel.
If the countries refuse to follow this advice, they don’t get the IMF’s bailout money and their economies continue to go down the drain.
This is coercion of the worst sort.
It results in drastic cuts in the living standards of millions of people literally overnight. It leads to mass unemployment— and often to food riots.
And while the IMF twists the arms of these developing countries, it also demands that they open up their economies to multinational corporations and banks, which imperils their sovereignty.
The IMF abuses power to get its way.
And that’s what the IMF’s chief is accused of doing, too.