NEWS From My Perspective!

May28-2009:

Countries Or Economies MUST Be Managed Like A Business!

It bothers me very much every time I hear complaints from some Head Of States complaining about unfair IMF or World Bank expectations, when it comes to loan guarantee or issuances to them. So I have decided to do some research into some of the reasons why the above institutions seem to be the financier that no one likes, but needs sometimes.

* Most countries that seek IMF financial assistance are in dire financial straits for several reasons. These being the following:

* An ill managed national economy.

* And economy where there is no forward planning policies that are realistically geared to that country's growth and productive capacities.

* An economy that is primarily Centrally or Government controlled and supervised.

An economy that has very limited or real social infrastructure that can cope with or cater to commercial investment, creativity, freedom to import certain products or goods, that will ensure the survival or continuation of certain industries that need these goods or products. And the over taxation of private enterprises, to the point that they cannot operate in a financially viable environment any longer.

* And finally, mass corruption in government bureaucracies, private industries, and the general mentality within the commonweal to get rich quick, at any cost.

Having outlined some or most of the underlying reasons that cause those countries to seek financial assistance from the IMF or the (International Momentary Fund). 

I will give some of my observations about the impact that these loans, the application of those loans, and the programs they are targeted for, in order for those economies to rebound, able to experience economic growth, and the ability to repay those loans. 


It is to be expected that when a bank lends you money, they do so based on your ability to repay that loan with interest. Interest is what the bankers and their shareholders need to stay in business. And like a bank, governments operating in the interest of the state MUST do so like they were operating a business, in order for that state to survive economically, politically, and socially. All decisions or policies must be geared towards internal growth, productivity, the encouragement of private investment which will provide employment for the people, and a stable economic and political environment, for these two institutions to operate and strive.

If there is political strife that gets out of control, causing a national security situation. Then business suffers, people get frightened, employees are afraid to walk the streets, send their children to school, customers stay at home more, and spend less, if they feel threatened on the streets or in their homes. And if the Police Institutions indulge in harassment of people unfairly, or indulge in unlawful activities against any persons or groups, which could spiral into social unrest.

All of these factors are taken into consideration by IMF or any foreign investor, before they decide to invest in any economy. So if at times we feel that the IMF is too severe in their expectations or interventions before or after granting loans to developing countries. We have to remember all of the above factors, before we arrive at any premature judgement of their actions.

Derryck.
NYC.