Adonis Diaries

Posts Tagged ‘economy

Reconstruction of Beirut city center? Like Solidere? By whom again?

Solidere (Societe Libanaise de Reconstruction) is a chartered company in charge of reconstructing and managing the city center of Beirut. The concession was supposed to be valid for 25 years, and Fouad Seniora PM extended the permit for 75 years in November 2005. Seniora was the right hand of late Rafic hariri PM who was assassinated on Feb. 14, 2004.

This private company owns a third of the city center or (108,000 sq.metres). In Sept. 2010, a year after taking office, Saad Hariri PM (son of Rafik) took private possession of 30,000 sq.metres of downtown Beirut and paid for by Solidere.

Solidere was created in 1992 with the total backing of Saudi Arabia and the blessing of the financial neoliberal decision-makers in the US.

Through figure heads, Rafik Hariri gathered the majority of the shares.

Destroyed and badly damaged properties in the city center were expropriated under dubious circumstances and bought judges and ther controlled municipality of Beirut, and the owners of the properties were compensated by shares in the company.

The trick is that Rafik manipulated the stockprices and bought shares at ridiculous prices from panicked shareholders.

What Solidere does?

It sells and rents apartments and offices that guarantee huge profits. How?

1. Prime Lands were acquired virtually for free,

2. The cost of construction was minimal due to cheap Syrian work labor,

3. The investment in infrastructure was mostly done by public money,

4. Public money were poured in the Hariri contracting firms, and at inflated cost estimates

5. The side public institutions related to finance, reconstruction, and internal security… were attached directly to the Prime Minister (Rafik Hariri)

6. The former shopping centers and areas such as Hamra Street and Achrafieh were totally neglected for several years so that the city center attracks all the traders and banks andforeign multinational companies…

7. The network of urban highways and tunnels mainly served the city center to encourage companies to relocate to Solidere Real Estates

8. The airport was 15 minutes away and the seafront less than 5 minutes far, and the city center was located in the main axes to enter and leave Beirut…

9. The prime land of Ouzai district, an extension to Beirut’s seafront of luxury hotels, was inhabited by southern Moslem Shiaa, refuggees from the civil war, and they refused to vacate this district.

The planned Alissar luxury project was blocked temporarily.

Hariri undertook to have a highway run through Ouzai in order to have a legal leverage to pressure the people to leave, and he failed.

If Hariri had the best interest of the people in mind he would have built a flyover express highway as the one crossing the Armenian district of Burj Hammoud in East Beirut. And the highway to the south is detached in several places because of the rapacious personal  interests of the Hariri clan.

Building permits in this lucrative city center, if the projects do not get a go by the Hariri oligarchy, are routinely blocked by Beirut municipality, totally in control of the Hariri clan. And the Hariri clan can side step regulations on urban development to match their interests and the Saudi princes and Emirs of the Gulf…

For an entire decade (1992-2002), Lebanon was run by a triumvirate of Rafik Hariri PM, President Hrawi, and Chairman of parliament for life Nabih Brrri, with the total backing of Syria, saudi Arabia and the USA administrations.

The Lebanese chapter of Transparency International has abundant substanting documents on this matter. The chapter wrote:

As a result of this arrangement, late Hariri became the sole decision-maker on the reconstruction process of the city center, Nabih Berri (chairman of the parliament for life) was given the charge of the reconstruction and relief programs for south Lebanon. Walid Jumblatt, the Druze warlord was given the relocation of refugees Box, and president Hrawi was interested in the oil and gas sector…”

After the failed preemptive war of Israel in June 2006, the opposition coalition put the pressure on the Seniora government to desisit from its oligarchic policies. They set up tents in the city center for 16 months (Oct. 2006 to May 2008). a sit-in symbolizing the exclusion of the people’s re-appropriation of their city center

As a result, investors shifted their interests to Ashrafieh and Hamra Street. The Hariri clan was taken aback and lost vast amount in profits.

Solidere considered moving its wealth to Jordan, in the Al Akaba, Red Sea seafront, to invest in the vast luxury contracting project of the elder son of Rafik Hariri.

The neoliberal expatriate wealthy class forced on this pseudo-State over $70 bn in debt that Lebanon didn’t need so that they satisfy quick wealth to all the warlords and their clientelist political sectarian bases.

The irony is that this neoliberal system is stating that the first $30 bn generated from the potential gas and oil offshore extraction will go to servicing the debt.

They never learn from previous experiences of other States who opted to default and are now well grounded on their feet and prospering.

Note 1. In the Middle-East, the relatioship between political regimes and space is based on political patronage. A city is a place of power to control the space and influence the central government.

This reconstruction project is viewed by the elite classes (foreigns, expatriates, and local bank owners…)  as success story. It is viewed as a striking failure by the Lebanese in resolving unstable social and political class-divide.

Note 2: This urban planning of Beirut city center is inherited by the recent Arab Gulf Emirates Real Estates development programs (Dubai…) with the explicit purpose of attracting foreign investment… This project wanted the Lebanese to believe that “neoliberal globalization” will save Lebanon from its endemic insecurity from its regional enduring conflicts (Israel, jihhadist…)

Note 3: Article inspired from a chapter by Fabrice Balanche in the book “Lebanon After the Cedar Revolution

Census shows widening gap between rich and poor…Is that a surprise?

The rich got richer and the poor got poorer in New York City last year.

The poverty rate reached its highest point in more than a decade, and the income gap in Manhattan, already wider than almost anywhere else in the country, rivaled disparities in sub-Saharan Africa.

ublished on September 20, 2012 in NYT:

“While the national recession officially ended in 2009 and Mayor Michael R. Bloomberg has repeatedly proclaimed the city’s robust recovery, the census figures released on Thursday painted a decidedly sober view of how New Yorkers are faring.

“To see the poverty rate jump almost a full percentage point is not a good sign,” said David R. Jones, the president of the Community Service Society of New York, an antipoverty advocacy and research group. “We’re still seeing really high rates of unemployment, while jobs have been growing in an anemic way and the jobs that have been created are really low-wage.”

While Mr. Bloomberg has made reducing the poverty rate, now nearly 21 percent, a priority, administration officials acknowledged that the stagnant national economy had hurt the city.

Samantha Levine, the mayor’s deputy press secretary, said on Wednesday: “These poverty numbers reflect a national challenge: the U.S. economy has shifted and too many people are getting left behind without the skills they need to compete and succeed….”

As former President Clinton recently said, ‘The old economy is not coming back,’ and that’s why the mayor believes we need a new national approach to job creation and education, one that gives everyone a chance to rise up the economic ladder.”

Median household income (the split line between the 50% incomes) in the city last year was $49,461, just below the national median and down $821 from the year before (compared with a national decline of $642). Median earnings for workers fell sharply to $32,210 from $33,287 — much more than the national decline.)

New Yorkers at the bottom end of the income spectrum lost ground, while those at the top gained.

Median income for the lowest fifth was $8,844, down $463 from 2010. For the highest, it was $223,285, up $1,919. (The difference is about 300 fold in yearly income)

In Manhattan, the disparity was even starker. The lowest fifth made $9,681, while the highest took home $391,022. The wealthiest fifth of Manhattanites made more than 40 times what the lowest fifth reported, a widening gap (it was 38 times, the year before) surpassed by only a few developing countries, including Namibia and Sierra Leone.

Only one other county in the nation, Clarke County, Ga., where nearly a third of the 117,000 residents are college students, reported a higher income gap.

Except for a decline in the poverty rate among children under 5, virtually every indicator was grim and suggested growing inequality.

Poverty rates rose most among Hispanic people, New Yorkers over age 65, married couples, residents of Manhattan and Queens, and those without a high school diploma. The citywide increase to 20.9 percent from 20.1 percent was slightly higher than the national increase, but still left the rate in New York below that of many other big cities.

Nearly 1.7 million city residents were officially classified as poor, or with an income of less than $18,530 for a family of three. Some 750,000 were subsisting on less than half the poverty level.

The proportion receiving food stamps increased to 20.6 percent from 19.3.

Among poor New Yorkers 16 and older, a third had worked full or part time within the preceding year.

“The statistics demonstrate quite clearly that our most vulnerable neighbors are far from a recovery,” said Jilly Stephens, executive director of City Harvest, which helps get emergency food to hungry New Yorkers.

A version of this article appeared in print on September 20, 2012, on page A22 of the New York edition with the headline: Income Data Shows Widening Gap Between New York City’s Richest and Poorest.

“Time Banks”? Banks Not to the liking of multinationals?

I read: “In developed States, not all poor citizens own a car…But most public officials use public transports…” And I go: “Wish Lebanon had any kinds of public transport: I would feel enormously rich, riding one of them, public transports…”

A woman works at a street stall in Madrid. Some Spaniards are signing up for “time banks,” where individuals perform services based on their skills, and receive another service in return. No money changes hands.

LAUREN FRAYER published on September 22, 2012 under “Time Banks’ Help Spaniards Weather Financial Crisis”

After saving money for years, Lola Sanchez was finally able to buy a car refitted with a ramp and space for a wheelchair in the back for her teenage son, who has cerebral palsy.

A nurse used to come each day to help with her son’s care. That service was cut amid government austerity measures, though Sanchez still gets a small check every month.

Unemployment is rampant in Spain and full-time jobs are scarce. Here a woman works at a street stall in Madrid. Some Spaniards are signing up for "time banks," where individuals perform services based on their skills, and receive another service in return. No money changes hands. A woman is shown here working at a street stall in Madrid.

EnlargeOli Scarff/Getty ImagesUnemployment is rampant in Spain and full-time jobs are scarce. A woman works at a street stall in Madrid. Some Spaniards are signing up for “time banks,” where individuals perform services based on their skills, and receive another service in return.
“What I need is physical help, even more than financial assistance,” Sanchez says, “because I can’t physically lift my son on my own.”

So earlier this year, Sanchez joined a local “time bank” that sends members to help with her son’s care. She doesn’t pay them. Instead, she reciprocates by using her handicap-friendly car to transport other disabled people in her community.

With Spanish unemployment near 25%, many people have more time than money to spend. So in the past two years, the number of time banks in Spain has doubled, to nearly 300 Time Banks. Most have anywhere from 50 to 400 members, and some even print their own currency.

Most of all, they stress equality, Sanchez says.

“For me, it’s good to know that my time has the same value as anyone else’s,” she says. “There’s no difference between one hour of work for a computer specialist or for a cleaning woman.”

Time banks originated in the 19th century in America and Europe among socialists who emphasized the direct link between their labor and what they could get for it

Parents take their children to School No. 103 on the first day of the new school year in Valencia, Spain, on Sept. 7. Spanish students, parents and teachers are feeling the pinch of the ongoing European debt crisis.

A Sense Of Purpose

Most time banks nowadays operate online. You register for a profile — sort of like a Facebook page — that lists your work skills, and then lists the tasks you’re looking for someone else to do for you.

“Whatever you can imagine,” says José Luis Herranz. “You can fix a car, or paint a wall, or cook some food, or even clean the windows.”

Herranz helped start the time bank Sanchez belongs to in Madrid, late last year. The 27-year-old monitors the barter of services among members — about a third of whom are unemployed — and logs their hours online.

Amid constant government cutbacks, Herranz says the time bank gives people much-needed work, and also a sense of purpose.

“We have to trust each other, to create solidarity networks,” he says. “We feel we are alone, and we have to help each other.”

Julio Gisbert is a conventional banker, but spends his spare time as a consultant to time banks across Spain. He helps them avoid charges of tax evasion — people are working, but not for money, so they pay no income tax.

“One of the rules is that the services exchanged can’t be continuous and indefinite,” Gisbert says.

“Imagine you’re a time banker who teaches English, and someone wants classes every week,” he says. “In theory, the time bank can’t do that because an English-language academy can come along and denounce you. They’re paying tax and their professors, and you’re not.”

So the services must be sporadic to be legal. That doesn’t stop some time bankers from working 20 hours a week, in a variety of odd jobs.

Rebuilding Communities

Gisbert says time banks are especially useful in Spain, where traditionally close family ties have been fractured by urbanization in the past generation, and now by unemployment.

“It’s a question of reconstructing the sense of community that used to exist in Spanish villages in the old days, which doesn’t exist here in the city,” he says.

José Luis Herranz, the time bank organizer, is now getting his 55-year-old mother, Maribel, involved in Madrid.

“I was born here in this neighborhood, and wow. How things have changed,” she says.

A housewife all her life, Maribel is working outside the home for the first time, side by side with younger neighbors who’ve been laid off from their jobs. She gives cooking lessons and does grocery shopping for the elderly.

The neighborhood’s jobless rate is still at an all-time high, at more than 30 percent. But through their time bank, these neighbors have found a way to be productive.

Apartheid on all fronts: Israel persists on religious ideology in civic education, in mercenary colonial outpost in Middle-East…

Author Sami Michaeel, a Jewish Israeli from Iraq, has been delivering speeches and conducting seminars on the need for Israel to consider the alternative existential policy of integrating with the people in the region.

It is the responsibility of Israel to prove that it is ready to be part of the Middle-East region, and desist from resuming the policy of being the foreign colonial outpost to the western nations (Britain, France, and lately the USA in succession), desist from further preemptive wars, and seriously negotiate a long-term peace treaty with the Palestinians

Sami latest study was delivered at the “International convention for Israeli studies” hosted in Haifa.

Sami insists that Israel has become the worst apartheid State in the entire world.

Since 1967, after Israel expanded its occupation of Palestinian and Arab States lands, the spirit of Israel has been polluted and poisoned…

Israel thinks that it cannot afford to bail out as an outpost: It wants the most sophisticated weapons, keeps its weapon industry expanding and exporting more military hardware to African States, receive lavish donations to open up new colonies…

Adar Cohen, inspector of civic studies, agreed to sign on the published new civic education school book “On the road to civic citizenship“, a civic school book which transcend the fundamental Zionist ideology of apartheid and pure race, and exclusive Jewishness status…

And Adar was promptly sacked: This is not a good time for internal politics to demonstrate that Zionism is “that civic”

Israel has been applying a mind-fix policy to enforce her ideological thinking in all the Palestinian schools, and on diffusing any kinds of opinions that go counter to the radical Jewish religious ideology.

Israel has imposed on the Palestinian Authority in the West Bank its concept of “Economic Peace“, a unilateral contract based on the two premises:

1. Under the current conditions, there will be no resolutions for the cases of Jerusalem, the Palestinian refugees, and Hamas in Gaza. Consequently, the Palestinians should drop any illusion for any final peaceful agreement.

2. The occupation of Israel of the Palestinian territory is a serious threat to the stability and sustainability of the society in Israel. This colonial occupation is a demographic, moral, and political danger. The occupation is threatening to destroy the policy of forming a pure Jewish State.

The tacit reason for extending more trade and economic facilities in the West Bank is due to the evidences that points to the idea that occupation will inevitably ignite a Third Mass Disobedience Palestinian movement (Intifada). And Israel feels it be unable to tame this intifada by the sheer force, time around.

Thus, Israel is planing to extend small economical facilities for the current Palestinian Authority to lick on and defuse the growing grunting of the Palestinians under occupation.

Note: Post inspired by three articles published by Antoine Shalhat in the Lebanese daily Al Nahar.

International Monetray Fund (IMF) extends a costly loan to Egypt: The hidden restrictions

President Mursi’s bid for a $4.8 billion loan is raising questions as to what the exact benefits of increasing Egypt’s debt will be and the likely long-term repercussions on the economic situation.

International Monetary Fund (IMF) Managing Director Christine Lagarde (2nd L and bent over) checks some pyramid stones next to security guards while listening to a guide’s explanation as she tours the pyramids in Giza, at the end of her visit to Egypt, 22 August 2012. (Photo: Reuters – Asmaa Waguih)

The Popular Campaign to Drop Egypt’s Debt issued a statement Thursday opposing the IMF loan and questioning the lack of information about “the extent to which the Egyptian economy needs this massive amount of dollars.”

The group protested that there had been no discussion of alternative ways of financing public spending, adding that the government had obtained foreign loans amounting to $6 billion over the past year without any democratic oversight. Governments appointed by the military since the revolution had also borrowed record amounts from Egyptian banks, it said, and “it is not known how they were spent.”

The campaign added that neither Mursi nor his party had explained how the measures they would adopt to secure the loan would differ from “the policies of impoverishment pursued by Hosni Mubarak for 30 years.”

It noted that its declared purpose was to cover the budget deficit rather than invest in social justice and employment, but that the loan would put further pressure on the budget in the long run by increasing the debt servicing and repayment burdens.

Bisan Kassab published a translation from the Arabic Edition in the Lebanese daily Alakhbar, and posted it on August 24, 2012 under “The Hidden Costs of Egypt’s IMF Loan”

Cairo – There have been some unexpected reactions from Egyptian political forces to the multi-billion dollar loan which President Mohammed Mursi is trying to secure from the International Monetary Fund in the next few months.

Opposition to the loan has been voiced by the Freedom and Justice Party (FJP), the political arm of the Muslim Brotherhood (MB) from which Mursi hails. It objected to the lack of available information about the terms of the proposed deal.

Abdul-Hafez Sawi of the FJP’s economy committee explained that the party still holds the view it took when the loan was proposed to parliament by the military-appointed government of Kamal al-Ganzouri.

Sawi said: “We still don’t know anything about the program under which Egypt will get the loan or the measures and steps that will be taken to cut government spending, reform fiscal policy and collect unpaid taxes.  We need to consider who will bear the burden of repayment.” With the amount to be borrowed now being put at $4.8 billion rather than the original $3.8 billion

The FJP did not take issue with the loan on ideological grounds, given the Islamic prohibition on usury. Sawi argued that it is permissible to pay interest on loans under the expediency provisions of Islamic law, especially when alternative support from fellow Muslims is unavailable – “for example, when the wealth of the Gulf is spent on buying palaces in Paris rather than helping the poor on the Comoros Islands.”

Sawi added that he hoped “to propose Islamic ways of providing finance to the international institutions.”

The Nour Party, the political arm of the Salafi movement and one of the most doctrinaire of the Islamist parties seems to have become more pragmatic after a year and a half of direct engagement in politics since the revolution.

Abdul Halim al-Gammal, who sat for the Nour party in the upper chamber of parliament’s finance and economy committee, explained the thinking behind its backing of the IMF loan:

“Any loan that advantages the lender in the context of dealings between individuals is usury. But it is different when it relates to international institutions, because the reason for the religious prohibition – exploitation – does not apply. If the nation were to shun all international transactions whose nature it does not have the power to change, it would squander major opportunities.”

The liberal Wafd party, which held the third largest bloc of seats in parliament, called for the deal to be concluded with the IMF as soon as possible. The party’s finance spokesman, Fakhri al-Fiqqi, said it wanted the loan’s economic program extended from one-and-a-half to three years “so as to change it from an emergency program into an extended financing facility.”

Fiqqi, a former IMF staffer, said he hoped this would facilitate the introduction of difficult structural reforms in Egypt, such as the gradual elimination of consumer subsidies, “starting with the introduction of a coupon system, and eventually ending all subsidies, in exchange for raising salaries, for example.”

The business community also enthused about the prospect of an IMF loan.

Hani Geneina, macroeconomics analyst with investment bank Pharos, said: “Many clients have started returning to the treasury bond and equity markets since the resumption of negotiations with the IMF after a halt of several months. The final signing is bound to mean an inflow of foreign investments in the longer term because of what the loan will mean in terms of confidence in the Egyptian economy and putting an end to fears that it could be joining the bankruptcy train like Greece,”

But other saw things differently.

Political objections to the loan are not confined to concerns about its social impact. Constitutional and legal issues would also be raised if Mursi were to use the legislative powers he has assumed to push through the loan before a new parliament is in place.

That would amount to ratifying an international agreement, which is unambiguously the role of the legislature, explained Supreme Constitutional Court judge Tahani a-Gabali. It would amount to denying the public any oversight over the deal, and raise fears about the near-absolute powers that have been concentrated in the president’s hands.

 

US weapon market share: Two-third of world total ($85 bn) and tripled during Obama…

The report on weapon sales was prepared by the nonpartisan Congressional Research Service, a division of the Library of Congress. The annual study, written by Richard F. Grimmett and Paul K. Kerr and delivered to Congress on Friday, is considered the most detailed collection of unclassified arms sales data available to the public.

Overseas weapons sales by the United States totaled $66.3 billion last year, or more than three-quarters of the global arms market, valued at $85.3 billion in 2011.

Russia was a far distant second, with $4.8 billion in deals.

 published in the New York Times on August 26, 2012:

WASHINGTON — Weapons sales by the United States tripled in 2011 to a record high, driven by major arms sales to Persian Gulf allies concerned about Iran’s regional ambitions, according to a new study for Congress.

The American weapons sales total was an “extraordinary increase” of over the $21.4 billion in deals for 2010 and was the largest single-year sales total in the history of United States arms exports.

The previous high was in fiscal year 2009, when American weapons sales overseas totaled nearly $31 billion.

A worldwide economic decline had suppressed arms sales over recent years. But increasing tensions with Iran drove a set of Persian Gulf nations — Saudi Arabia, the United Arab Emirates and Oman — to purchase American weapons at record levels.

These Gulf states do not share a border with Iran, and their arms purchases focused on expensive warplanes and complex missile defense systems.

The agreements with Saudi Arabia included the purchase of 84 advanced F-15 fighters, a variety of ammunition, missiles and logistics support, and upgrades of 70 of the F-15 fighters in the current fleet.

Sales to Saudi Arabia last year also included dozens of Apache and Black Hawk helicopters, all contributing to a total Saudi weapons deal from the United States of $33.4 billion, according to the study.

The United Arab Emirates purchased a Terminal High Altitude Area Defense, an advanced antimissile shield that includes radars and is valued at $3.49 billion, as well as 16 Chinook helicopters for $939 million.

Oman bought 18 F-16 fighters for $1.4 billion.

In keeping with recent trends, most of the weapons purchases, worth about $71.5 billion, were made by developing nations, with about $56.3 billion of that from the United States.

Other significant weapons deals by the United States last year included a $4.1 billion agreement with India for 10 C-17 transport planes and with Taiwan for Patriot antimissile batteries valued at $2 billion — an arms deal that outraged officials in Beijing.

A policy goal of the United States has been to work with Arab allies in the Persian Gulf to knit together a regional missile defense system to protect cities, oil refineries, pipelines and military bases from an Iranian attack.

The effort has included deploying radars to increase the range of early warning coverage across the Persian Gulf, as well as introducing command, control and communications systems that could exchange that information with new batteries of missile interceptors sold to the individual nations.

The missile shield in the Persian Gulf is being built on a country-by-country basis — with these costly arms sales negotiated bilaterally between the United States and individual nations.

To compare weapons sales over various years, the study used figures in 2011 dollars, with amounts for previous years adjusted for inflation to provide a consistent measurement.

Note 1:  The weapon purchases of Saudi Arabia and the Gulf Emirates are just tacit policies of warehousing weapon reserves for the US military in eventual emergency wars in the Middle-East, instead of planing for aerial bridges to transport expensive and heavy weapons.  In any case, it is well-known that oil sales are reverted to the US treasury and for aiding in US covert operations not approved by Congress…Yearly astronomical deals so that the US guarantees the absolute obscurantist regimes in Saudi Arabia and the absolute Gulf Emirates

Note 2: After 4 decades, it is about time that the US desist sub-contructing its foreign policies in the Middle-East to Israel

 International Monetary Fund:  Top Ten Reasons to Oppose the IMF

I have already written a dozen posts about the calamities and damages that International Monetary Fund has and is still doing on world financial and economic stability.  An extra concise article is a great reminder, from an unknown author.

What is the IMF?

Also available as a
pre-formatted flier.
(PDF 35kb)

The International Monetary Fund and the World Bank were created in 1944 at a conference in Britton Woods, New Hampshire, and are now based in Washington, DC.

The IMF was originally designed to promote international economic cooperation and provide its member countries with short-term loans so they could trade with other countries (achieve balance of payments). Since the debt crisis of the 1980’s, the IMF has assumed the role of bailing out countries during financial crises (caused in large part by currency speculation in the global casino economy) with emergency loan packages tied to certain conditions, often referred to as structural adjustment policies (SAPs).

The IMF now acts like a global loan shark, exerting enormous leverage over the economies of more than 60 countries. These countries have to follow the IMF’s policies to get loans, international assistance, and even debt relief.

Thus, the IMF decides how much debtor countries can spend on education, health care, and environmental protection. The IMF is one of the most powerful institutions on Earth — yet few know how it works.

  1. The IMF has created an immoral system of modern-day colonialism:  The IMF — along with the WTO and the World Bank — has put the global economy on a path of greater inequality and environmental destruction. The IMF’s and World Bank’s structural adjustment policies (SAPs) ensure debt repayment by requiring countries to cut spending on education and health; eliminate basic food and transportation subsidies; devalue national currencies to make exports cheaper; privatize national assets; and freeze wages. Such belt-tightening measures increase poverty, reduce countries’ ability to develop strong domestic economies and allow multinational corporations to exploit workers and the environment A recent IMF loan package for Argentina, for example, is tied to cuts in doctors’ and teachers’ salaries and decreases in social security payments…The IMF has made elites from the Global South more accountable to First World elites than their own people, thus undermining the democratic process.
  2. The IMF serves wealthy countries and Wall Street: Unlike a democratic system in which each member country would have an equal vote, rich countries dominate decision-making in the IMF because voting power is determined by the amount of money that each country pays into the IMF’s quota system. It’s a system of one dollar, one vote. The U.S. is the largest shareholder with a quota of 18 percent. Germany, Japan, France, Great Britain, and the US combined control about 38 percent. The disproportionate amount of power held by wealthy countries means that the interests of bankers, investors and corporations from industrialized countries are put above the needs of the world’s poor majority.
  3. The IMF is imposing a fundamentally flawed development model: Unlike the path historically followed by the industrialized countries, the IMF forces countries from the Global South to prioritize export production over the development of diversified domestic economies. Nearly 80 percent of all malnourished children in the developing world live in countries where farmers have been forced to shift from food production for local consumption to the production of export crops destined for wealthy countries. The IMF also requires countries to eliminate assistance to domestic industries while providing benefits for multinational corporations — such as forcibly lowering labor costs. Small businesses and farmers can’t compete. Sweatshop workers in free trade zones set up by the IMF and World Bank earn starvation wages, live in deplorable conditions, and are unable to provide for their families. The cycle of poverty is perpetuated, not eliminated, as governments’ debt to the IMF grows.
  4. The IMF is a secretive institution with no accountability: The IMF is funded with taxpayer money, yet it operates behind a veil of secrecy. Members of affected communities do not participate in designing loan packages. The IMF works with a select group of central bankers and finance ministers to make polices without input from other government agencies such as health, education and environment departments. The institution has resisted calls for public scrutiny and independent evaluation.
  5. IMF policies promote corporate welfare: To increase exports, countries are encouraged to give tax breaks and subsidies to export industries. Public assets such as forestland and government utilities (phone, water and electricity companies) are sold off to foreign investors at rock bottom prices. In Guyana, an Asian owned timber company called Barama received a logging concession that was 1.5 times the total amount of land all the indigenous communities were granted. Barama also received a five-year tax holiday. The IMF forced Haiti to open its market to imported, highly subsidized US rice at the same time it prohibited Haiti from subsidizing its own farmers. A US corporation called Early Rice now sells nearly 50 percent of the rice consumed in Haiti.
  6. The IMF hurts workers: The IMF and World Bank frequently advise countries to attract foreign investors by weakening their labor laws — eliminating collective bargaining laws and suppressing wages, for example. The IMF’s mantra of “labor flexibility” permits corporations to fire at whim and move where wages are cheapest. According to the 1995 UN Trade and Development Report, employers are using this extra “flexibility” in labor laws to shed workers rather than create jobs. In Haiti, the government was told to eliminate a statute in their labor code that mandated increases in the minimum wage when inflation exceeded 10 percent. By the end of 1997, Haiti’s minimum wage was only $2.40 a day. Workers in the U.S. are also hurt by IMF policies because they have to compete with cheap, exploited labor. The IMF’s mismanagement of the Asian financial crisis plunged South Korea, Indonesia, Thailand and other countries into deep depression that created 200 million “newly poor.” The IMF advised countries to “export their way out of the crisis.” Consequently, more than US 12,000 steelworkers were laid off when Asian steel was dumped in the US.
  7. The IMF’s policies hurt women the most: SAPs make it much more difficult for women to meet their families’ basic needs. When education costs rise due to IMF-imposed fees for the use of public services (so-called “user fees”) girls are the first to be withdrawn from schools. User fees at public clinics and hospitals make healthcare unaffordable to those who need it most. The shift to export agriculture also makes it harder for women to feed their families. Women have become more exploited as government workplace regulations are rolled back and sweatshops abuses increase.
  8. IMF Policies hurt the environment:  IMF loans and bailout packages are paving the way for natural resource exploitation on a staggering scale. The IMF does not consider the environmental impacts of lending policies, and environmental ministries and groups are not included in policy making. The focus on export growth to earn hard currency to pay back loans has led to an unsustainable liquidation of natural resources. For example, the Ivory Coast’s increased reliance on cocoa exports has led to a loss of two-thirds of the country’s forests.
  9. The IMF bails out rich bankers, creating a moral hazard and greater instability in the global economy:  The IMF routinely pushes countries to deregulate financial systems. The removal of regulations that might limit speculation has greatly increased capital investment in developing country financial markets. More than $1.5 trillion crosses borders every day. Most of this capital is invested short-term, putting countries at the whim of financial speculators. The Mexican 1995 peso crisis was partly a result of these IMF policies. When the bubble popped, the IMF and US government stepped in to prop up interest and exchange rates, using taxpayer money to bail out Wall Street bankers. Such bailouts encourage investors to continue making risky, speculative bets, thereby increasing the instability of national economies. During the bailout of Asian countries, the IMF required governments to assume the bad debts of private banks, thus making the public pay the costs and draining yet more resources away from social programs.
  10. IMF bailouts deepen, rather than solve, economic crisis:  During financial crises — such as with Mexico in 1995 and South Korea, Indonesia, Thailand, Brazil, and Russia in 1997 — the IMF stepped in as the lender of last resort. Yet the IMF bailouts in the Asian financial crisis did not stop the financial panic — rather, the crisis deepened and spread to more countries. The policies imposed as conditions of these loans were bad medicine, causing layoffs in the short run and undermining development in the long run. In South Korea, the IMF sparked a recession by raising interest rates, which led to more bankruptcies and unemployment. Under the IMF imposed economic reforms after the peso bailout in 1995, the number of Mexicans living in extreme poverty increased more than 50 percent and the national average minimum wage fell 20 percent.

adonis49

adonis49

adonis49

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