Wednesday, January 17, 2007

What's your poison?

Alberto Guevara, Nicaragua's new finance minister, gives his first interview to the FT today. Reducing poverty is his main goal as 80% of the population survives on under $2 per day. He says he'll welcome financial and economic co-operation from any and all sources, including the IMF. While attending Daniel Ortega's swearing-in ceremony last week, Hugo Chavez, president of Venezuala, said that assistance from the IMF was "like drinking a glass of poisoned water."


Anonymous Anonymous said...

And the idea that Paul Wolfowitz is in charge there is beyond irony...

11:25 pm  
Anonymous Anonymous said...

Last summer, sad man that I am, I spent several afternoons in the sunshine of Queen Square reading 'Globalisation and its Discontents' by Joseph Stiglitz.

Not exactly a title to stir the heart, and the topic of economics is not what the marketing men would call 'sexy'.

But the story is, in effect, a soap opera of the 'turf war' between the IMF and the World Bank, both set up for ostensibly different purposes, but both competing to restructure failing economies. As each chapter goes by, and the tales of woe at different countries are related, once is reminded slightly of the 'turf wars' that mafia bosses or drug barons carry out. They see the mayhem caused and the lives damaged as just as means to an end as they carry out 'experiments' on different nations.

Ultimately both organisations try to prove that they know best what to do for a country - the thought that they should sit down, compare notes and have a tripartite framework [IMF, World Bank and the country] to best use everyone's experience, never really occurs to them.

Of course, I should point out that some changes to a market economy have been very successful. But others were not.
They, in effect, replaced failing state monopolies with failing private monopolies. A salutary tale of global economics and how these days, even in the UK and US, the politicians are far less powerful than we think - global companies and institutions are often the puppet-masters pulling the strings.

10:59 am  

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