Venezuela Watch

And Bolivians still suffer from the effects of a decrepit municipal water system. What is worse they still cling to the illusion that somehow someone will fix this problem for them. They pay for their stubborn folly with disease and the lack of economic growth. Raising the price of good quqlity water to a level sufficient to pay for the improvements needed will very quickly attract the capital - domestic or foreign - needed to continue improvements in it. Holding the price down through government action is the best possible way to preserve an unhealthy system. Railing against unseen foreign bankers and corporations is an excellent way to sustain the ignorance and susceptability of the people to the self-serving lies of populist tyrants.

http://www.globalexchange.org/campaigns/wbimf/imfwbReport2001.html

The policies of the International Monetary Fund and the World Bank have systematically undermined democratic principles and eroded human rights protections in dozens of countries around the globe.


By insisting that national leaders place the interests of international financial investors above the needs of their own citizens, the IMF and the World Bank have short circuited the accountability at the heart of self-governance, thereby corrupting the democratic process. The subordination of social needs to the concerns of financial markets has, in turn, made it more difficult for national governments to ensure that their people receive food, health care, and education -- basic human rights as defined by the Universal Declaration of Human Rights. The Bank's and the Fund's erosion of basic human rights and their perversion of the democratic process have made the institutions a clear and present threat to the well being of hundreds of millions of people worldwide. The institutions, Global Exchange strongly believes, must be abolished and redesigned from scratch through a genuinely democratic, inclusive and transparent process involving all of the world's nations.


For more than 50 years, the IMF and the World Bank have advanced a form of economic "development" that prioritizes the concerns of wealthy lenders and multinational corporations in the industrialized north while neglecting the needs of the world's poor majority. The institutions work as a kind of international loan shark, exerting enormous influence over the economies of more than 60 countries. In order to get loans, international assistance, and debt relief, countries must agree to conditions set by the Bank and Fund. Under the guise of promoting "free trade," market liberalization, and financial stability, these two institutions have forced cuts in health care, education and other social services for millions of people across the planet, thereby deepening poverty and increasing inequality. By elevating concerns about macroeconomic financial stability above all other competing values, the institutions have created a human rights catastrophe.

georgeorb, What do you think the word capitalist means? Look at the word itself.

I hope your not trying to tell me Bectel cares about Bolivia getting clean water.

IMF and World Bank economics are a proven con. If there is good (which I think there is) and bad capitalism this is an example of the very worst. That is why we are seeing what we are seeing in South America.

And if you want to defend capitalism you should start by exposing the policies of the IMF and the World Bank. Why do you think loan sharks are illegal and considered gangsters? Global gangster loan sharks and they use violence to back it up.

I fear you have stuffed your head with so much propaganda there is no place left for simple observation and deduction.

No nation is forced to accept a loan from either the World bank or the IMF. All have the freedom to simply ignore these international banks and conduct their own economic affairs as they see fit, subject only to the wisdom and stability of their own policies and the productivity of their people. There is no shortage off examples of poor nations with few natural resources at their command which have bootstrapped themselves into great prosperity through their own efforts and with little aid from these banks. Singapore and Korea are examples that spring quickly to mind.

There are also numerous examples of nations that have wasted huge sums of international aid to graft and projects of little economic value.

No nation has an intrinsic right to the property and capital of another. There is no intrinsic evil or anti economic element in the interest of a lender in getting his loan paid back - especially if as is the case with the IMF amd WB the loans are provided at less than the prevailing interest rates. A nation that has squandered previous loans in non-productive enterprises has no rightful complaint if potential lenders insist on policies that will lead to future economic growth as a condition for yet another loan.

The one certain way to preserve general poverty is to provide extensive government direction of economic activity, regulation of labor markets, and a high degree of taxation and social welfare programs. Examples of this phemnomenon abound. There are also some stunning examples of the rapid economic ascent that quickly follows when countries finally abandon such nice sounding but absurd in execution programs. India is a prominent recent example: China is another.

Ok georgeob1, I'll abandon all my propaganda and I'll let you tell me. Why is south America going Socialist?

I'm not so sure that it is doing that. Even in Brazil Lulu talks a good game but he has preserved the conservative economic policies of his predecessor. Bolivia, Peru and Equador have long been economic basket cases and there is no reason to expect improvement, Chile was put on the right economic track during and after the Pinochet regime and they have had the good sense to preserve it since then. Argentina has had a 50 year nightmare since Peron.

Overall the South American historical track record doesn't recommend them as much of a model. Are you suggesting that they know or have discovered sometning we don't know? I believe that is a laughable proposition.

Hugo Chavez is a comic, but tragic (for the people of Venezuela) figure who fully deserves our contempt.

(Same article continued from above)

Argentina's decision to pay off the IMF is the latest in a series of Latin American moves rejecting Washington's neoliberal economic policies. Brazil also recently announced its decision to pay off its IMF debt early, and presidents throughout the region, such as Argentina's Kirchner, are increasingly winning elections based on platforms rejecting the economic policies of the past 20 years. Sunday, Bolivia's Evo Morales became the latest presidential candidate to win on such a campaign.


Between 1980 and 2000, under the guidance of the IMF, the region saw an almost 8 fold decrease in economic growth over the previous 20 years, according to a study of the Washington-based Center for Economic and Policy Research. In late 2001 Argentina, once the poster-child of IMF success from good economic governance, suffered one of the region's worst economic collapses.

Nonsense ! The IMF didn't run the economies of these countries. It merely loaned them money and, as any banker would do, negotiated some covenants with the borrower on which the line of credit was contingent. I doubt that any serious observer really gives a damn if Argentina and Brazil pay off their current loans and borrow no more from the IMF. These are their choices to make, and if their internal policies are sufficiently wise they will thrive: if not they will come knocking at the IMF door in a few years.

Considering Argentina's track record for defaulting on its international debt payments, Chavez is taking a big risk with Venezuela's national treasure. At the first hint of instability in the petroleum market and in the next cycle of declining prices Venezuela will be on its knees economically.

georgeob, There are volumes of information contradicting what you are telling me.

Is it all propaganda?

Borrowing money and not paying it back is not a neoliberal Washington policy. Paying back money you owe does not reject any neoliberal Washington policy. And that's a good thing. In fact, I hope the Argentinian government will be neoliberal enough to pay back the money it owes its other creditors too. I have never understood what's so heroic about borrowing money and not paying it back.

Where is there mention of a debt not being paid back?

And why are we not reading that sentince the same way?

Or that these people think not paying money back is heroic?

Please, I am very curious about this.

Argentina is in default on substantial international debt right now. Those evil folks in the IMF want some positive assurances that Argentina will honor their existing debt service obligations as a precondition for lending them more money. Perhaps you find this an outrageous position for them to take, I don't and evidently Thomas doesn't either.

Apparently Hugo Chavez believes that by foolishly lending the money of the people of Venezuela to a high risk borrower like Argentina , he is somehow telling us to piss off and doing us some kind of harm. In fact he is sowing the seeds for yet another sad repitition of the economic follies that have marked the economic history of South America. The world is passing them by: even China and India are ahead of them now. Hugo the dumb can finance the collapse of Bolivia, Peru, and Equador as well for all I care.

The IMF, by the way, is traditionally (and currently) led by a European): it is not an instrument of U.S. policy.

Argentina's political, social and economic structures are finally beginning to recover after the largest sovereign default in history. President Kirchner has successfully consolidated and stabilized the political and social systems while gross domestic product growth in Argentina expanded last year by almost 9 percent.

Encouragingly, political consolidation and social stabilization are becoming entrenched and will contribute to continued strong economic growth over the next two years.

This is an enormous achievement for a country that was gripped by unprecedented political and social instability between 1999 and 2002, when the cumulative contraction of gross domestic product approached 20 percent.


More compelling than the economic collapse that occurred during this period was the surge of individual poverty, which increased from 27 percent of the population in 1998 to 54 percent of the population in 2002. The political, social and economic disasters that befell Argentina were largely the product of IMF-induced economic policies. By discarding these policies, the Kirchner government has enabled Argentina's stabilization and recovery.

http://www.ameinfo.com/39001.html

Don't Cry for Bush, Argentina http://www.motherjones.com/news/feature/2000/03/argentina.html

The stuff you are quoting all has a definite point of view. if you read on you will note an acknowledgement that things are still very precarious in Argentina and that Kirchner's "reforms" consist merely of the old, familiar state corporatism and regulation of labor and service markets that caused Argentina's earlier problems and which have produced - at best - economic stagnation in the countries that have used them.

It is merely convenient for Argentina to damn its international creditors - to whom it will limit debt repayments to 10 cents on the dollar - and insist that it will no longer seek such credit. After the default it will be a very long time before Argentine bonds are marketable anywhere (except perhaps with Hugo the Dumb.)

A bit hard for me to read criticisms of a recommended tight money policy in Brazil. without laughing. Brazil suffered nearly a century of double digit inflation that stifled capital investment and economic growtn. it was ended only as a result of sustained tight monetary policy. The result was the biggest period of sustained economic growth in the country's history. If soime now wish to go back to the "good old days' they are certainly welcome to it.

George, The economist that came up with the plans and policies are probably geniuses, economic Einstiens Right?. They knew what they were doing when they lent them the money and told them "Sign here and do what we say and it will help your country" when the whole time they knew what it would do.

You don't lend people money to make people your slave. If the IMF showed up at your door when you really needed money and offered you there plan, you would laugh in their face and kick them out into the street and I know you know this.

If there was a bank in you neighborhood ruining your less then economic savvy neighbors lives, livelihoods and families by coning them into loans liks the IMFs what would you do? This is just plan usery. USERY!

And now you have the attitude like you want these people to fail.

What if your son got a loan from the IMF and you went to visit him and the IMF said "We own your son and heres the contract. We own his house now too. He will have the loan paid of when hes fifty and he is not worth anything anymore." and over the IMFs shoulder your son was digging ditches for the IMF bankers new swimming pool. What would you do?

I run a moderate-sized business and am quite familiar with commercial banking. It is common when establishing a line of credit for the lender, the bank, to establish certain covenants on which the continuation of the line of credit is contingent. In business these generally take the form of limitations on earnings, current assets & liabilities, and net worth. If the covenants arre violated it is common for the loan to stipulate that the debt is payable in full on demand. Cynics describe this as a set of policies that ensure that only those who don't need the money can get a loan. However, from the bank's perspective this is merely prudent management of its assets (the loans it makes).

The IMF is a bank that makes particularly risky loans -- to sovereign nations that can (and do) occasionally repudiate their debt, leaving the lender out his money and with no legal recourse. The restrictions and covenants they put on their loans are not qualatatively different from those used by banks lending to individuals or businesses anywhere in the world. The term "usury" is used in reference to extremely high interest charges, such as those consumers pay on credit card debt. This is not the case with the IMF, which generally negotiates below-market rates with borrowing countries (thanks to the generosity of the sponsoring nations that fund it). IMF loans generally involve lower interest rates and better terms than the borrowing country could get in any private transaction or public offering of its bonds. You are dead wrong in your evaluation of this suituation.

I will agree that there are countries that have become addicted to debt and which persist in the pursuit of illusionary economic policies (usually as a way of retaining public support and political power.). However it is foolish to blame the IMF for that. Argentina's problems were entirely home made and they have not yet been solved. Argentina is likely to remain a dysfunctional player in the world economy for a long tiime - or at least until they elect a governmenbt that will deal honestly with the people and enact - and stick to - some sensible economic policies. So far the prospects don't look good.

Chavez is well on his way to the creation of a similar situation in Venezuels, despite the rich natural resources that country possesses. Wasted opportunity has been a central theme in the unhappy political and economic history of most South American countries. It is an all-too-human thing to blame others for one's own failures. That too has been the rule in South America.

If you study the economic successes that some developing countries have achieved you will find high degrees of self-reliance and realistic self-appraisal by those nations. Illusions. false hopes and blaming others are the game of losers.

The IMF can't make anyone their slave. It cannot force anyone to borrow money from it. It cannot enforce anything except the terms the borrowing government voluntarily agreed on when it signed the contract for the loan. If the government had not wished to abide by those terms, it should have borrowed money from somebody else, under some other contract. Admittedly the government may not find a more lenient lender, but that is hardly the IMF's fault.


George can speak for himself, but I don't want the country to fail -- I want governments to fail when they attempt to defraud their creditors. And yes, it bugs me when scoundrels like Kirchner and Chavez are celebrated like heroes. I don't like it when honest presidents like da Silva face an uphill battle for solving problems in a grown-up way. If those sentiments make me an evil neoliberal, so be it.

Thomas, Is usury (Loan Sharking) illegal in your country?



How does one assassinate a national economy? "Mainly with big credits", says Perkins.
His job was to procure billion credits for new infrastructures which couldn't just coped with economically. "Hydropower stations for Ecuador, electrification projects in Indonesia, airports in middle america". He mostly produced manipulated financial plans for the world bank and US Agency for International Development to justify credits: "It is not difficult at all to fake an allegedly immense rise of the gross national product, if one cheats with the data skillfully."

The billion-credits flowed then exclusively into orders for large US companies such as Bechtel and Halliburton.
Or at MAIN, an international consulting firm, for which Perkins worked as a chief political economist and whose main customer the World Bank was.
"In the long run most money never leaves the USA", he says with the emotionless voice of a speaker, as if he would hold a lecture before ignorant preppies. "It is only rerouted by the banks in Washington to the company centers in Houston, New York or San Francisco."

Does he finds it despicable? Did he write the book because of that? No, Perkins says, his intention was to provide a view behind the curtains of american politics. Because what seems as foreign aid at first - all the billions, which were pumped to strategically relevant regions -, is only better camouflaged power politics with only one goal: to manufacture political and economic dependence on the USA. "If we did our job right, the receiving countries were crushed by the burden of debts after a few years and had
to stop the payments to both to the american banks and the US companies", says Perkins. Then the actual demands came: "control of UN votes, installation of military bases, access to resources such as oil or the panama canal."

But what should be the motivation of the governments of Panama or Ecuador and all the other ones mentioned by Perkins as examples to ruin the own country?
Perkins was also responsible to create this motivation according to his own statements:
"Bribery, personal enriching, manipulation of elections".

That sounds very much like a conspiracy theory. But Perkins denies this sharply: "I cannot be lumped into this category" Particularly since conspiracy would have always the connotation of the illegality "But exactly this was so perfidious about of my job: Officially everything was most legal."

He was also never an official US agent. He passed an entrance examination for the NSA in 1968. However briefly before service start the management consultation MAIN, which is now Parsons, recruited him off. For Perkins however is clear: "I was explicitly told that I would work only superficially as a management consultant, in reality however as NSA instrument." "Threats and bribery kept me from writing this revelating book" explains Perkins the 20-year gap between book and its last employment.

Perkins does not work with documents, and he does not tell detailed numbers from individual projects. The book is written not for economic experts, he says , but for everyone. He is however aware that the questions about proves and detailed data must be answered: "it is probably time for a second book."

http://www.spiegel.de/spiegel/0%2c1518%2c348103%2c00.html