Christine Lagarde, MD, IMF |
Economic
historians would never forget what happened in the build up to the Asian
financial crisis of 1997. The meltdown was caused by the heavy reliance by
South Korea, Thailand, Indonesia, Philippines and Malaysia on short-term
foreign loans – reliance brought about by the advice given them by the International
Monetary Fund and the United States Treasury Department. Private enterprises in
those nations could no longer meet their payment obligations anymore. There was
palpable panic in the international currency market caused by this defaults.
Currency traders converted their Asian currencies into dollars leading to the
plummeting of the Asian currencies making it harder for them to pay back their
loans and escalating greatly the costs of imports.
IMF then
stepped in and told the debtor nations that they would provide the loans for
them to meet their foreign debt payments on the condition that they adopt
structural adjustment policies. Thailand, South Korea and Indonesia accepted
the loan while Malaysia rejected the loan and opted for the imposition of capital
control instead which closed up the economy and discouraged the activities of
speculators. The IMF laughed them to scorn initially for their bold move but
they were forced to eat their words after the storm had passed. The Thai
economy shrunk by 10.5% in 1998, rebounding to a mere 4.4% in 1999, Indonesia’s
contracted by 13.1% in 1998 and rebounded to a pitiable 0.8% in 1999 with
poverty rising from 11% before the crisis to between 40 and 60%. Food shortage
was so terrible in the largest Muslim nation on earth that the then President, B. J. Habibie, asked the citizens to
fast twice a week. In South Korea, unemployment rose from 3% to 10% with
suicide a common occurrence. Contrast this with Malaysia whose economy
contracted by 7.4% in 1998 and then rebounded by 6.1% a year later. The nation
governed with the visionary leadership of Dr.
Mahathir Mohammed has gone on to become an Asian Tiger with its economic
miracle recovery studied in a similar mould to that of Singapore.
Malaysia was
smart enough to keep its economic policies away from the ruinous Bretton Woods
Institution. No country has ever developed with partnership from the IMF.
Japan, whose economy rose so much that it became the second most prosperous on
earth in barely 19 years, didn’t do so with any IMF economic advice. China, the
world’s fastest growing economy didn’t have regular meetings with IMF officials
for her to lift 600 million people out of poverty. Even South Korea that once
fell prey to the IMF had to extricate themselves from their stranglehold in
order to get to the acme of development.
The whole
talk about not giving us a loan is all hogwash. We need to keep them far away
from us as you dine with the devil with a long soup. The IMF always steps in
when a country is experiencing crisis and the visit of their helmswoman is
timely. We are the biggest economy in Africa and we are one they can’t ignore
in their under development agenda. It’s in our best interest if we create
hostility and not to make the environment even conducive for such a visit. What
do we stand to gain? Loss of productive man hours on the part of the President
and the members of his key economic team in hosting a surreptitious foe. It’s
sad that the change Nigerians assiduously fought for is gradually becoming one of
the biggest scams in the nation’s history.
The
prescription of the IMF weakens the economic and social function of the state
by allowing the supremacy of market forces. The 2016 budget is clearly at odds
with the agenda of the neo-colonialist institution. The plan to recruit 500,000
teachers is parallel to their agenda of yanking off subsidy from education for
instance. The budget shows a sturdy state interventionist leaning which is in
contrast to their hands off of the state in the running of the affairs of the
nation.
The IMF
would clearly not gain from our development; It is high time we gave meaning to
our sovereignty by developing a home grown economic programmes that would get
us permanently out of the woods rather than always outsourcing our thinking
caps to the whipping boys of the West. (Source: Guardian)
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