Adonis Diaries

Posts Tagged ‘developing countries

 What’s your position on legalizing smoking and planting marijuana?

Is there a referendum to take place in your state for legalizing marijuana consumption?

Most probably, the opposing group will show ads of a 12 year-old smoking a joint. The TV programs will portray potheads, clandestine growers and dealers.

The medical aspects will be highlighted with discussions and debates.

Does marijuana affect driving? Like using smart phone while driving? Or being under the influence of alcohol?

Suppose a car accident takes place and the police discover some marijuana in your glove compartment? Even if the accident is none of your fault, this salient issue at this particular period becomes the focus of attention.

“Marijuana kills yet another motorist” could be the caption on a few dailies.

Though the statistical relationship between smoking marijuana and car accidents is almost nil, possessing illegal marijuana becomes the prominent feature, a stand-out attribute.

The same salient effect is attached to the rare women who become CEO in major corporations.

Although no ethnic group is responsible for a disproportionate number of bank robbery, if the police catch Nigerians, Somalians, Porto Ricans… red handed, then the right wing propaganda will have a field day and they want to stop immigration of colored people or Africans or Moslem people…

The same salient effect with rape cases.

Mostly, salient effect is predominant in forecasting: sensational news get the upper hand over the long-term effect or growth, and supersede rational thinking processes.

Slow-to-develop and hidden factors are neglected.

No need to be blinded by irregularities each time.

Focus on the trend and statistical significant facts.

So far, in all Sates and nations were consumption of marijuana was legalized smoking dropped, crimes generated from both gangs and police officers reprisals have dropped… Cost dropped and rendered less attractive to traffic of this drug.

Uruguay legalized planting of marijuana and the crops dropped in quantity. And legalized gay marriages: Have no statistics yet if gay relationship dropped.

Bolivia legalized planting coca leaves and the production dropped. It is in the culture of the indigenous Bolivians to chew on the leaves for endurance sake. Like the qat in Yemen?

The less expensive the product and the lesser its emotional value.

This is the case of current drop of oil prices. It has nothing to do with this crappy equation of demand and supply.

Supply in crude oil is huge and demand is huge: The superpowers have exercised undue influence on Saudi Arabia and the Gulf Emirates to continue high output of oil in order for the western superpowers, which accumulated most of the capital, to replenish their depleted reserves under the illusion of potential world conflagration.

The decrease in oil prices is excellent news for the developing countries who have refineries: The deficit will shrink a bit. No refineries? the cost of gas and oil will never drop for the developing countries.

If the price of oil stays low for an extended period, the strategic psychological effect will kick in: Since oil is cheap then its effective value has been lowered emotionally to the common people.

The oil producing countries are shooting themselves in the foot by giving the impression that oil has lost in importance and value.

At least, if the oil producing lower their output for the sake of future generation: Oil is the most important raw material for chemical and pharmaceutical industries.

The same process is underway after Obama’s “blood mineral” import prohibition. All rebel movements in the Congo and in Africa rely on exporting raw minerals to sustain their movements.

You might think that this move is to make it harder on the Chinese companies to import from Africa. Wrong. The Chinese use fictitious companies (license produced within 2 days in due forms in Hong Kong) to import blood mineral products.

As it dawn on the rebels that it make sense to lower the prices because of the difficulty for them to export, very soon most raw materials in Africa will drop in prices and the capitalist nations will replenish their depleting reserves.

Odious Dept: IMF sustained by developing countries interests on loans

When presidents and the oligarchies in developing States are extended liquidity at high interest loans from international creditors and are used for their own benefit instead of investing the money in public infrastructure, whose debt is it? The president’s or the people’s?

This question has led to increasingly charged discussions between indebted countries and economists at institutions like the World Bank and the International Monetary Fund (IMF). Especially in post-revolutionary countries like Egypt and Tunisia, people are asking: Why should we pay a debt that went straight to the pockets of a dictator, or worse, financed a security apparatus that oppressed us?

Actually, these kinds of loans are categorized as Foreign Aid disbursed to governments, instead to particular communities or institutions.

Raphael Thelen posted on NOw this Feb. 8, 2013

Philip Rizk and other activists are leading the Drop Egypt’s Debt Campaign to make the issue public.

“We want to open the accounting books of the Mubarak regime. Many of those credits aren’t legitimate, because the IMF worked with the old regime, even though they knew that the money would not benefit the people.”

Several members of Mubarak’s regime were sentenced for corruption last year. The clique of young businessmen surrounding his son Gamal famously embezzled funds and oversaw opaque deals that involved the privatization of public companies and natural resources.

These “market-friendly reform programs”, dubbed neoliberal policies, were part of the prescribed structural adjustments that came as conditions for the IMF loan.

The Odious Debt concept was first tested in Ecuador in 2008.

After an audit by an international commission, the country’s democratically-elected President Rafael Correa declared that 30% of the debt had been contracted illegally by the previous administration. The findings led to a debt reduction of $3 billion. “As a president I couldn’t allow us to keep paying a debt that was obviously immoral and illegitimate,” Correa said.

The World Bank, IMF and Western analysts predicted that the Ecuadorian economy would take a hit, saying that foreign investors would refrain from making deals with the country. Instead, Correa used the money that would have gone into debt service and invested it in public infrastructure projects and education.

In 2010, two years after the debt audit, the economy had grown by 3.6 percent, and in 2011 by 6.5 percent. Poverty rates dropped from 36.7 percent in 2008 to 28.6 percent in 2011. Annual income per capita rose from $3,540 in 2008 to $4,200 in 2011.

Two years later international investors are investing in Ecuador again.

Nick Dearden from the human rights group Jubilee Campaign sees Ecuador as a role model for other countries. “If you look at the countries that defaulted on their debts, they are doing much better now. They have thrown Western institutions out and now are using their own resources,” he said.

Tunisia, where the Arab Spring originated, is pursuing a similar course.

A bill that is being prepared to be presented to the parliament asks for a debt audit and cancellation of debts that had been illegitimately contracted under ousted dictator Zine el-Abidine Ben Ali. The Tunisian government’s external debt is currently $14.6 billion, or 33 percent of the country’s GDP. Foreign debt payments are $1.9 billion a year, or 15 percent of government revenue. Though it is not clear how much, a part of the foreign debt was taken by Ben Ali’s regime, and debt audit activists say they might be odious.

As in Egypt, Ben Ali and his cronies were known for their corruption.

A letter signed by 100 members of the European Parliament is calling “for an immediate suspension of EU debt repayment by Tunisia (with frozen interests) and an auditing of the debt.” Belgium’s parliament as well has called for a similar suspension of all bilateral debts. Ecuador has offered the Tunisian government its experience in auditing its debt.

So far, Tunisia’s post-revolutionary government is cooperating with the IMF and the World Bank and has continued Ben Ali’s market-friendly economic policies of low taxes for corporations, the privatization of public firms and resources, as well as the flexibility of the labor law.  The resulting widening gap between rich and poor has sparked protests across the country.

In the difficult economic conditions of post-revolutionary countries like Tunisia, the easiest way to gain liquidity or repay existing debts is to take on new debts. But this only pushes the problems into the future, while the influence of institutions like the IMF grows along with indebtedness.

The IMF depends on the interest payment on debt of developing countries.

“This way the form of democracy might be preserved, but the people lose their decision-making power over their economy. They won’t be able to influence the country’s economic policies in a way that reduces poverty,” says Dearden. “The way out of this is a debt audit and a cancellation of its illegitimate

Note: On IMF failed mission




February 2023

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