From: Robert J. Bradbury (bradbury@aeiveos.com)
Date: Sat Aug 25 2001 - 08:58:46 MDT
Mike Lorrey said:
> No, they are not free to spend it on social welfare programs.
Huh? You have distorted the argument Mike. What I said the
program indicated was that the IMF would *not* allow Jamaica
to loan the money to its farmers at interest rates lower than
what the IMF was charging.
I said *nothing* about "social welfare" programs unless you
consider building hospitals or schools "social welfare".
I don't know precisely what the money was spent on, it would
take a detailed investigation of Jamaican government budgets
to determine that. There are certainly many cases where
the money most likely was spent in building palaces for
dictators or dachas for the loan administrators. However
in Jamaica's case the money may have been spent on
the police force to keep relative order with large numbers
of unemployed individuals as a result of the trade policies.
I simply suggested hospitals or schools as infrastructure
projects that 3rd world countries might construct in an
effort to uplift themsevles -- however the use of the funds
for such projects is problematic if it is going to force
them to go back to the IMF for larger loans because they
cannot repay the loans they already have. If you don't
use the funds in ways that directly serve to increase
your ability to repay the loans *during* the term of the
loan, then it looks to me like you are screwed.
> A bank would get mighty pissed if I took out an auto loan
> and used the money on a vacation to Fiji.
Huh? American banks are *more* than happy to lend you
money to take a vacation to Fiji. They will even send
you checks to do so that carry a 9.9% interest rate.
They just assume you will pay it back and penalize you
if you miss payments.
Now in the case of IMF & Jamaica, it looks like coming
in the door, they are assuming it isn't going to get paid
back *and* try to arrange the loan conditions so that
you can't become competitive enough in world markets that
you would have the income (presumably from taxes on the
banana producers) to repay the loan.
> I don't. I see it as "You're not allowed to use this money on heroin, or
> food stamps, but only on buying a car so you can get your ass to work
> each day."
Mike, that isn't the case here. If there are no jobs then it
doesn't matter if you have a car or not. If you want to make
the case that Jamaica mis-spent the money on social welfare
programs GO FIND SOME EVIDENCE FOR IT!
Thanks to Charlie for filling in some of the pieces by providing
some "data" on how the situation has changed from his perspective.
That suggests that "non-free trade", i.e. of the type where presumably
the government and the people "accepted" an "arranged" trade situation
(perhaps because the British felt it appropriate to "repay" some past
imperialistic policies) is not, at least in this special instance,
highly objectionable.
I notice that nobody seemed to comment on my comments about the
rather hefty increases in subsidies the U.S. farmers seem to be
getting now.
Robert
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