Guest views are now limited to 12 pages. If you get an "Error" message, just sign in! If you need to create an account, click here.

Jump to content
  • CRYPTO REWARDS!

    Full endorsement on this opportunity - but it's limited, so get in while you can!

Countries ’experiences with the IMF: social tragedy


yota691
 Share

Recommended Posts

 
1487.jpg
The International Monetary Fund logo
  

 Arab and international


The Economy News - Baghdad

"When People think about the harm that rich countries - usually led by the United States and its allies - to other people in the world, might think of war. But rich countries also have great power over the lives of billions of people, through their control of global institutions, such as the International Monetary Fund. This position was mentioned in an article published in the British "Guardian", on July 27, 2019. Talking about the International Monetary Fund, the institution that has 189 members, is dominated by five countries: the United States (16.74%), Japan (6.23%), Germany (5.81%), France (4.29%) and Britain (4.29%). A "veto" from Washington alone will void any decision. What the Guardian highlights is that it is not possible to deal with global institutions independently of geo-political conflicts, and to act as if “money”, “culture” or “humanity” are separate from politics. For more explanation, the Guardian article compares Ecuador and the United States of America. The Latin country last year signed an agreement with the IMF to borrow $ 4.2 billion over three years, “the condition of expelling public sector employees, raising taxes in a way that is harmful to the poor, reducing public investment, and reducing the budget by 6% of GDP throughout the program period ... can you imagine Reducing the US budget by 1.4 trillion dollars? ” The program threatens to torpedo a "previous decade of political reforms." But the problem with Ecuador is that “the previous government was leftist and independent of the United States. Now, the Donald Trump administration is gaining tremendous power in Ecuador, through a cash fund loan, and a $ 6 billion loan from Washington-based multilateral institutions Do you imagine reducing the US budget by 1.4 trillion dollars? ” The program threatens to torpedo a "previous decade of political reforms." But the problem with Ecuador is that “the previous government was leftist and independent of the United States. Now, the Donald Trump administration is gaining tremendous power in Ecuador, through a cash fund loan, and a $ 6 billion loan from Washington-based multilateral institutions Do you imagine reducing the US budget by 1.4 trillion dollars? ” The program threatens to torpedo a "previous decade of political reforms." But the problem with Ecuador is that “the previous government was leftist and independent of the United States. Now, the Donald Trump administration is gaining tremendous power in Ecuador, through a cash fund loan, and a $ 6 billion loan from Washington-based multilateral institutions».

A few days ago, the Lebanese government announced a program request with the International Monetary Fund. The move is portrayed as "the expected salvation", which the country will recover from its deficit, re-activate the economic movement, and flood the country with investments ... "drowning" really takes place, but because of the conditions that the "fund" will impose, and the government will not "have the luxury" of negotiating about it. When the fish gets stuck in the hook, their return to the water becomes subject to the fisherman: either release it or throw it into its basket .

"The economic reforms that the IMF requires as conditions for lending, often caused counterproductive and destructive populations," says American economist Joseph Stigels. In what comes the experiences of Argentina, Greece, Egypt, Jordan and Tunisia with the international institution .

 Argentina: Huge political gamble

Argentina is one of the members of the Group of Twenty (a forum that represents the largest 20 economies in the world, and its countries account for two-thirds of world trade and more than 90% of global output), and is the third largest economy in Latin America ... and one of the "most famous" at the level of crises Economic. Since 2001, the Argentine economy has suffered from a deficit, deflation, worsening poverty rates and inflation rates exceeding the 50% threshold. It is noteworthy that the International Monetary Fund will be "in tandem" with Argentina during all these years, and continues to dump it with debt without showing any positive result of its work. The path of the monetary fund in the Latin country dates back to 1999, with the adoption of the privatization option in the oil, telecommunications and energy sectors, and approval of all "orders". As for the largest "assistance", it was the year 2018, when Argentine President Mauricio Macri, who is described as "a friend of financial markets and investors", agreed to accept a loan of $ 57 billion, from which the government took $ 44 billion, before declaring that it was unable to pay the debt. A "massive political gamble", Macri's decision was considered. As for Francis Coppola, she wrote in Forbes an article entitled: “The Monetary Fund has not learned anything from the Greek crisis.” The opposing reaction crystallized because the Argentine economy deteriorated very quickly simply by implementing the latest program with the IMF, “and the last time we witnessed this deterioration was in Greece in 2012”, according to Coppola. The IMF continued to lend to a country that was unable to pay its debts and was experiencing a recession (decline in growth). Public debt increased from 241 billion dollars to 321 billion dollars, and in 2019 it constituted more than 90% of the GDP, in conjunction with a sharp decline in the value of the currency, as well as the exit of foreign capital from the country. Argentina imposed austerity measures, such as reducing subsidies on electricity and water and increasing taxes. The poverty rate increased from 29% to 35%, and prices increased by 5% every month, and consequently the purchasing power of a huge number of citizens decreased.

Greece: The Cause of Misery

In April 2016, "WikiLeaks" published a document that includes a conversation between the head of the IMF mission to Greece Delia Filkelsko, the director of the European administration at the fund, Paul Thompson, and Eva Petrova working at the fund. They were looking at how to impose Greek debt relief on the agenda of European creditors. In other words, they wanted to threaten to exit the 86 billion euro bailout deal, and to stop paying money, to force the European "troika" to cut Athens' debt. Why did the IMF want to expose Greece to bankruptcy? Until European countries step in, help one of the eurozone members, and Greece continues to pay its debts, including loans to the IMF. The document then caused a stir in the Greek government, which accused the "fund" of trying to "destabilize political stability in Europe ."

The WikiLeaks document also revealed that the head of the IMF mission to Greece was "surprised" that Greece "succumbed to the procedures", which Greek Finance Minister Euclid Tsakalotos described as "harsh", and included deductions from pensions. The program caused misery for the population, most of whom lost a third of their salaries, and unemployment rose to 27.8 in 2014 before currently declining to 16.4%, and 100,000 people leave each year annually since the crisis began in 2010, and the debt-to-GDP ratio reached 180.2% at the end of the quarter The second of last year, banks became overburdened with unpaid loans .

Egypt: "Economic success" ... and a high percentage of the poor

In November 2016, Egypt signed a $ 12 billion debt agreement with the International Monetary Fund, when it was suffering from a rise in government and public debt deficits, a decrease in foreign currency reserves, a low rate of economic growth, and a widening difference between the formal and informal currency markets. The agreement did not enter into force before Egypt liberalized the exchange rate of the pound, reduced subsidies for fuel and food, sold property to the state, and imposed new taxes. Under the leadership of Abdel-Fattah El-Sisi, Egypt has implemented all that is required of it. When the "Fund" wanted more concessions, he suspended the fifth installment of the loan, until the government eliminated all subsidies for energy prices. What happened is that the liberalization of the exchange rate led to a significant increase in inflation (the high level of prices for all goods and services), which affected the livelihood of the population. In 2016 subsidized fuel prices increased by between 30 and 46.8%. In 2017, drug prices were raised between 15 and 20%. The value added tax increased from 10% to 14%, with the exception of some basic food products, in addition to reducing public spending on health and education. The Egyptian measures coincided with the discovery of large reserves of gas in the sea, but this did not affect the total Egyptian exports, and therefore did not contribute to creating job opportunities except in this sector..

"It is interesting how economic success in Egypt is linked to a significant increase in the proportion of people living below the poverty line," wrote journalist Amir Khafagi in the website "Open Democracy" in 2019. According to an official survey of family income, spending and consumption (HIECS) , the proportion of poor people increased from 27.8% in 2015 to 32.5% in 2017. But how did the economy grow at an annual rate of 4.2%, per capita income grew by 2%, and unemployment decreased from 13.1% to 8.1% between 2014 and 2018? "Millions of Egyptians earn less than the minimum, and growth affects the 1% of the population ."

Jordan: Government debt continues to rise

In August 2016, the International Monetary Fund agreed to grant Jordan a $ 723 million loan over three years. However, it was not the first loan, nor the first "failed" experience. Since 2012, loans have not succeeded in reducing government debt in Jordan, despite tightening austerity measures. Even in 2017, a year after the start of the new program, Jerry Rice, director of communications at the IMF, said that, "in order to end the rapid increase in public debt, the tax base must be expanded as part of revenue reform." We did not recommend products that should be subject to higher taxes, and we affirmed not to raise the prices of commodities that the poor consumed. But in 2018, protests erupted in the country due to cuts in government spending on essentials, high prices, and adjustments to income tax. In the 2019 World Development Report, Jordan's minimum wage cuts and zero-hour contracts appeared, while ignoring basic workers' rights .

Nevertheless, Jordan was marketed as a successful model for the IMF. In a research paper prepared by Jane Harijan, Hamid Al-Saeed and Qinggang Wang, it appears that this was "exaggerated, and was resorted to to justify the continuation of the payment to Jordan," hinting that the matter was related to the alliance with the United States of America. The figures used in the study were not reliable, and Jordan did not adhere to “targeted reforms”, and the evaluation of the program “was based on the result of growth and not on the source of growth, which was not associated with significant productivity improvements and focus in one sector, which raises questions about the long-term sustainability of the results.” Growth ».

Tunisia: the "Fund" program at the service of "corruption "

Tunisia has a long history with the International Monetary Fund. Between 1987 and 2001, the IMF signed 9 loan agreements with Tunisia, without the country experiencing the required growth. On the contrary, the policy of privatization and austerity exacerbated the "misery of the population" through the absence of plans for social protection, hindering the development of productive sectors, and thus creating job opportunities. The result, then, was a high level of "corruption" and a concentration of wealth in the hands of those close to former President Zine El Abidine Ben Ali .

In 2013, a new $ 1.74 billion loan was signed. The high cost of living, the imposition of new taxes, and the reduction in support for the population, have sparked popular protests. Since the introduction of the program, average inflation has risen more than 6%, food prices 10%, and electricity and household gas prices 10%. “Increases” continued in 2014 to include vehicle taxes, which directly affected taxi drivers and farmers. Tunisia tended to privatize the remaining state property, liberalized financial markets, decreased the value of the currency, and reduced government spending. Then she set out in 2016 to borrow again from the IMF, requesting $ 2.8 billion over four years.».

Algeria: We hate borrowing from foreigners

Algeria is one of the few cases in the world, specifically the Arab world. A few days ago, Algerian President Abdel Majid Taboun announced that his country would not ask for a loan from the International Monetary Fund, despite the financial crisis that resulted from the collapse of international oil prices and the closure of the country due to the epidemic of "Coffid-19". He declared during a meeting with the Algerian media that "the accumulation of debt harms national sovereignty. Algeria prefers to borrow from its citizens instead of the International Monetary Fund or the World Bank, ”recalling the heavy debts that Algeria incurred in the 1990s because of a program with the IMF, and expressing its refusal to borrow from foreign banks, because that would“ prevent Algeria from clarifying its position on issues, among them The fate of the Palestinians and Western Sahara .

 
 
Number of views 157   Date added 04/05/2020
Link to comment
Share on other sites

Join the conversation

You can post now and register later. If you have an account, sign in now to post with your account.
Note: Your post will require moderator approval before it will be visible.

Guest
Reply to this topic...

×   Pasted as rich text.   Paste as plain text instead

  Only 75 emoji are allowed.

×   Your link has been automatically embedded.   Display as a link instead

×   Your previous content has been restored.   Clear editor

×   You cannot paste images directly. Upload or insert images from URL.

Loading...
 Share

  • Recently Browsing   0 members

    • No registered users viewing this page.


  • Testing the Rocker Badge!

  • Live Exchange Rate

×
×
  • Create New...

Important Information

By using this site, you agree to our Terms of Use.