Over the last week, we’ve had the spectacle of the Western media speculating about what is going on in Egypt in the absence of much understanding of the forces at work (this article by Paul Amar is a notable exception).
Needless to say, there has also been a great deal of consternation as to how the West’s supposedly vaunted intelligence apparatus failed to see this one coming. This lapse is as bad as the inability to foresee the collapse of the Soviet Union (it’s arguably worse: a lot of people profited from the Cold War, and they’d have every reason to fan fears and thus look for evidence that would support the idea that the USSR was a formidable threat. By contrast, one would think that conveying word that the domestic situation in Egypt was charged would have led to more intense scrutiny which ought to have served some interests (like various consultants and analysts). That suggests the US was so wedded to Mubarak that anyone who dared say his regime was at risk would get “shoot the messenger” treatment, and thus nary a discouraging word was conveyed).
John Dizard at the Financial Times tells us the IMF, which issued a country report last April based on two weeks of visits in February 2010 (with government officials and “representatives from the private sector, academia, labor organizations, and the parliament”) also failed to see the crisis coming. As he notes:
The first point the report makes is that “Sustained and wide-ranging reforms since 2004 had reduced fiscal, monetary and external vulnerabilities, and improved the investment climate. These bolstered the economy’s durability, and provided breathing space for appropriate policy responses”.
In the previous year, the staff collectively goes on, “economic performance was better than expected, although headline inflation remains elevated . . . as the recovery gains strength, the focus of policies can shift back toward fiscal consolidation and other growth-oriented reforms”.
Not that the all-seeing Fund didn’t anticipate some possible future problems. As the report cautions: “Capital inflows, if continued, will complicate monetary policymaking.” This “real appreciation driven by short-term capital flows could weaken medium-term growth prospects”. Somehow, I think, Egypt is going to avoid the problem of excessive capital inflows in the short term. But thanks for the thought.
These aren’t quibbles about minor inaccuracies, or arguable ideological differences. There were imminent, overwhelming problems that either evaded the IMF’s attention, or that it chose not to report. So European leaders might want to reconsider whether they can depend on the IMF to act as a monitor, let alone arbiter, of good macroeconomic policy for member states.
If this isn’t bad enough, other sections of the report are downright embarrassing. The IMF does acknowledge that poverty is a bit of a problem, and look at the remedies it suggests:
Reforms for Sustained Growth
9. Continuing the reform momentum and reducing fiscal vulnerabilities remain the key medium-term challenges. Rapid growth is crucial to tackling poverty and the high level of unemployment. In this context, reinvigorating the structural reform agenda should help raise productivity and reinforce Egypt’s competitiveness.
Prioritizing reforms that promote macroeconomic stability and improve the investment climate will support the resumption of foreign direct investment. As noted, the planned fiscal adjustment and tax reforms are an important element of generating confidence, improving the business environment, and ensuring space for the private sector. Resumption of privatization and development of public-private partnerships (PPPs) will help mobilize private sector financing and know-how. Contingent liabilities associated with PPPs, however, should be monitored closely.
Reinforcing financial soundness and promoting financial sector deepening will help mobilize savings needed to finance private sector-led growth. The stability of the financial sector during and since the crisis is a testament to reforms since 2004. Staff supports the continuation of reform efforts with the CBE’s Phase II agenda. Introducing Basel II standards and supporting financial sector development will help facilitate intermediation of savings and increase private sector access to credit. Staff supports plans to adopt additional prudential measures to contain vulnerabilities that will arise with greater integration with the global economy and the introduction of new asset classes. Close coordination between the new nonbank supervisory authority and CBE will be a priority, and consideration should be given to introducing forward-looking risk management and developing global standards on liquidity and leverage.
Strengthening data quality and transparency will help improve the policy debate and business environment, and enhance Fund surveillance. The need for greater transparency and higher frequency data was underscored by the global financial crisis, and enhancements would help ensure that data availability is on par with other emerging markets. In particular, there is a need for more robust CPI and GDP deflators, and for publishing higher-frequency aggregate financial soundness indicators (as planned), and encouraging banks to make available detailed performance and soundness indicators.
This is all neoclassical trickle down twattle. People are hungry and can’t find work, and what does the IMF have in its toolkit? “Public private partnerships”. In a country with crony capitalism, that’s a prescription for further looting and redistribution of wealth to the top. Oh, and we’re gonna further liberalize financial markets, if we just give the banks more freedom, a thousand flowers will bloom! Yes Basel II did such a great job of keeping Eurobanks from blowing themselves up, it’s just what the doctor ordered. And the fact that the staffers consider getting the GDP deflator right as a way to fight poverty shows how out of touch with reality they are.
This little snippet illustrates the intellectual bankruptcy that is pervasive in elite organizations. They are so blinded by ideology that they seem unable to connect simple, observable datapoints. Normura, shortly after the Tunisian government fell, published a quick and dirty analysis of the vulnerability of governments to food price inflation. Egypt was admittedly only number 6 on the list, by virtue of having food as 48.1% of household consumption and being a food importer. But at least Noruma fingered Egypt as being at risk ahead of the widespread protests.
By contrast, the IMF based its reading on chats with the officialdom and gave short shrift to basic data like the distribution of income and how many were living below and just above subsistence level. Maybe this embarrassment will serve as a wake up call, but somehow I doubt it. The fact that so many other institutional analysts got this one utterly wrong will give the IMF lots of protective covering.
34 comments
Comments are closed.
That first quote sure sounds like the IMF has been snorting its own stuff.
And then there’s the second part. Here, in acknowledging the existence of the devastation they’ve wrought, they recommend setting the burn victim further on fire (“Apply more flame…”). This is an example of the totalitarian intent and procedure of globalization. They will never, ever stop short of a condition where a handful of super-rich rule over a literal slave empire.
One factor which will determine whether or not they succeed will be the extent to which the people are able to see them clearly as such totalitarians.
(The NYT is doing its part for the enemies of humanity; the other day it had an editorial practically frothing at the mouth in anger over how Obama’s globalization offensive seems to have slowed down in South Korea. It went on to laud how agreements with Columbia and Panama must go forward. But since the NYT knows what a criminal lie this is, since the record of globalization and its crimes is unanimous and overwhelming, it has no actual arguments to make. It just keeps sputtering, repeatedly, “this is good for America”. Krugman was silently nodding somewhere.)
Maybe it’s not incompetence but design. The world the IMF envisages may not be the same – and in my view definitely isn’t the same – you and I would want to see happening.
Also, a destablized Egypt, Jordan, Lebanon and Syria can be viewed as a good thing for Israel. If it intended to make another land grab, this is the best that could happen to them.
Any wonder that East Asia and much of Latin America shut its doors on the IMF ? Eventually this will happen everywhere.
Imagine you’re an IMF staffer drawing up the report. Of course you’re going to tell the higher-ups stuff they don’t want to hear so you can damage your career prospects.
For the higher-ups it’s always April 1945 in the Fuhrerbunker.
This was not an epic fail. Do you expect the IMF will put out dire reports on 3rd world dictatorships in a proactive attempt to change their political direction?
Get real.
Go read the OilDrum’s analysis ( http://www.theoildrum.com/node/7425 ) of the Egyptian economy. That’s all you really need to know to determine how this will play out. Nobody has any answers and Egypt is the model for future Middle East political change.
You can’t have your whole country on welfare and not have an economy that can provide for them. Egypt will come to understand they need to integrate with the world economy and compete for investment and economic growth.
That Islamist “schtick” has got to end. Otherwise their people will starve. If you want proof, put the Muslim Brotherhood in charge and watch the resulting declining economy retard the country.
In the end, individual Egyptians will clean up their mess. Property rights (a la Hernando De Soto’s work – http://online.wsj.com/article/SB10001424052748704358704576118683913032882.html ) needs to be put in place now.
Don’t blame the IMF. They don’t get involved when things are going great. They only step into help basket cases. Blame the leaders (and the people who allow them to prosper) for turning their country into a basket case.
Straw man. There is a huge difference between the poles you suggest, saying everything is rosy, and using reports to apply pressure. Bureaucratic CYA is a well honed skill in elite organizations. The lack of any hedging in the IMF report, particularly the failure to take high levels of unemployment and household budget stress into account, is a clear ANALYTICAL failure, not a matter of careerist caution.
Egypt and Tunisa weren’t intelligence fails. They are called that by power elite adivisors looking to shift blame, and it’s no suprprise the media passes on the meme, but it’s founded on a misunderstanding. The function of intelligence agencies is not to evaluate contexts but to confirm biases. I’m entirely serious, and the historical evidence for this operational mission is legion. Oh, intelligence is gathered. Just look at the smidgen on Wikileaks or the actual situation analysis released by the agencies. All of the problems were described in detail: corruption, repression, degradation, poverty, kleptocracy, environmental damage, etc. Everything was known and nothing was learned, because the goal was to confirm ‘who’s got the power,’ i.e. our guy, ergo situation normal. The powers that be literally DO NOT WANT TO KNOW about real problems; that might require them to change their objectives, and take the heat for making a call and managing the result. The function of intelligence agencies is to bolster top paygrade fabulations, so the higher-ups always fix the paper. ‘Intelligence’ agencies as they now perform are failures by design.
Re: the IMF, of this is normal performance for them. See, the IMF only looks at things from the top down, with the view that what is good for a (quasi)capitalist elite is good policy. Any policy that looks commensurate with that is good; any not, not. Dizard: ” . . . [T]wo weeks of visits in February 2010 (with government officials and “representatives from the private sector, academia, labor organizations, and the parliament”).” So the IMF ‘analysts’ go to Egypt, get chauffered around by Gamal Mubarak, Ahmed Ezz, and their handlers, looks at the offshored sweatshops set up there, is told that ‘the labor situation is under control,’ is told that ‘we have ample liquid reserves,’ and goes away assured that the IMF brand of rule-by-money-from-above is firmly in place and growing by the day. Academia? Don’t think any critic of Mubarak’s crony capitalists was allowed withing blocks of those ‘evaluators.’ Labor organizations? Which ones? Those that have been doing sit-down strikes against intolerable wages and working conditions, or the Steppin Fetchit hirelings of the elite?
And that assumes that the IMF went in with an evaluative modality, which is surely a false assumption on my part. Because, see, ‘Egypt was pursuing [neo]liberalization,’ so doing ‘the right thing’ by the IMF’s perspective, and so would be immune from criticism even if there were rough edges, so to speak, in the product. ‘Liberaliation’ in the IMF perspective means anti-socialism: selling state industries, shaving wages down, forcing local markets open to international capital (which will rob them blind or blow them up, usually both in that order), and generally prostrating a local authority to international capital via local kleptocratic middlemen. The whole function of the IMF is to _generate_ guys like Gamal Mubarak and Ahmed Ezz to function as running dogs for foreign capital. Of _course_ everything was going fine . . . .
Yves: ” . . . [I]ntellectual bankruptcy that is pervasive in elite organizations” Indeed. Elite organizations could do the analysis, they have plenty of talent available to them. But said organization exist to confirm to the elite that they are elite, that they are going to stay that way, and that this putative outcome is because their ways are the best ways. Analysis ‘muddies the message’ of that, so it’s beside the point at best.
Thus, did the IMF fail to recognize and describe Xtreme Looting 2.0 — Special Egypt Edition
And FWIW, I had to listen to this post twice; for a minute there, I wasn’t sure whether I’d inadvertantly clicked on an episode of The Daily Show. Snarkalicious ;-)
The real fail will be if Sinn Fein wins the Irish elections.
If they wanted so bad to avoid this outcome, all they had to do is tell Eurobanks to man up, stiffen their upper lip and take their losses like grownups.
Nobody forced these assholes to invest so recklessly and investment means occasional losses, the essence of true capitalism.
BTW, I wish Sinn Feinn win and repudiate the banking bailout altogether. Could make some badass waves in the financial markets but it is obvious some lessons must be relearned.
I so love the smell of raw capitalism in the morning! It smells…chickenshit fear!
hhmm….it’s actually amazing that they give policy prescriptions at all. I do disagree about having better data; better data is always good, but understanding the forces at work is how you get better data. Measuring CPI, etc without taking into effect subsidies and such, and without measuring political impacts of them is…stupid.
The bigger problem is that you cannot really come up with good policies absent a democracy…regulation is what brings confidence to markets ultimately(even if unjustified), and because regulation is inherently a function of democracy all other policy proposals are nearly worthless. The life of business and the consumer is always the ultimate link, and if you can’t control the interaction of the two to protect either one you get nowhere.
Oh and for them to have mentioned Basel II…I seriously hope that report was from pre-2008.
Nope, April 2010.
Unless you grow up in the Middle East or lived and made a living there, your chances to understand the region are slim or none. Reports from the area are skewed and distorted for decades. The IMF, on its part, is driver economically by the same thinking that didn’t see our 2007-2008 financial crisis coming. Why do we expect them to anything but a distorted view of Egypt?
Egypt is a country of 90 million people with huge percentage of people living in abject poverty and elite that resembles the Goldman Sachs riches. Neither the IMF nor the US can change much of this picture. (US aid to Egypt is about $30 per person annually; that is enough for laundry detergent.)
It isn’t an intelligent fail is a world view fail. Reading Egypt related op-ed articles in the NYT since the uprising reveals the most pathetic picture. None of the gents, Kristof, Cohen and Brooks has a clue. It’s as if they report from Mars. In particular, Kristof and Cohen show the same enthusiasm and analysis that many Democrats showed towards another major fail: Obama in the 2008 primaries.
Maybe it’s wrong to assume that the IMF wants to understand anything. The may just be interested in imposing their neoliberal agenda on everyone…
IMF? How did they miss the banking crises, or the credit bubble that drove the global real estate bubble? Let’s see could it be that they only look at the GDP which tells us nothing about how the people in the given economy are actually benefiting. Maybe it is in believing the manipulated data coming from the ruling classes. How about the IMF’s position that all debt should be guaranteed and paid by the taxpayer once IMF austerity measures are in place.
I suggest that the IMF have a chat with Simon Johnson, perhaps they can tweak their models for a more accurate view.
Egypt is no different than the numerous nations before or after the Egyptian awakening. Historically, repression of the people economically and politically by the ruling uber class will eventually fail. No surprise here.
Maybe the IMF could read Econned and look long and hard at their economic theories and models. Perhaps they could see the flaws in their assumptions.
Do you happen to know why Johnson left the IMF?
No.
hum… hum…. There is something in the Wood Pile with my good friend Barack and Egypt?
hum… hum… “My father 100 years Memoir”….
I do not know why the Humble, Gullible, Stupid and Crazy Hard Working Americans are Worshiping and Idolatrizeing Ronald W Reagan, when this is a Country of the People by the People that we are still in the state or quality of being free. Ronald w Reagan was an Actor… a Clown! and He play the function “The Office of the Presidency of the U.S.” but He was not a Good President!.. He was a Swindler… a Lier… a Cheater… He Defraud and bkoke many Office Rules and Peoples Rights!!! in short He was another Worthles or Useless President of our Evil Democracy!
hum… hum… The Power of the Poor will be the END of the Capitalism!
“Over the last week, we’ve had the spectacle of the Western media speculating about what is going on in Egypt in the absence of much understanding of the forces at work. And how the West’s supposedly vaunted intelligence apparatus failed to see this one coming.”
The “Emerging Consumer Survey” by Credit Suisse dated January 17, 2011, prior to the demonstrations in Egypt is an interesting exception.
https://www.credit-suisse.com/news/en/media_release.jsp?ns=41676
From the Survey
Egypt: feeling cautious
Egypt is the only country in the survey that registers net negative expectations for the respondents’ personal finances in the six months ahead. Egyptian consumers appear particularly downbeat on their prospects: 38% predicting a worsening versus 12% forecasting some improvement in their financial position over the next six months. However, this sentiment does not necessarily tally with consumer spending, which has remained solid. It is likely that macro factors of high inflation and currency devaluations, and possibly political uncertainty, have negatively influenced consumer responses to the survey.
The bulk of consumption is clearly skewed towards essential spending (given the low income nature of the economy). However, the financial prospects for the relatively higher income groups are improving.
”epic fail” presume the intentions where good, one can doubt that. “Mistakes” was made or was it, as Einstein defined madness; doing the same thing over and over and expecting different results. An honestly I don’t believe IMF is neither stupid nor mad.
“The IMF’s Epic Fail on Egypt”
There is nothing “Epic” here, they are just doing what they supposed to do – bringing neoliberal policy to host country – bringing the war. That is what IMF/WB did in former Yugoslavia after the protest and refusal of citizens to accept Structured Adjustment. The IMF and WB along with the consultants such as Jeffrey Sachs of Columbia University are “organ” of US/EU and recently of China’s governments. While I sympathize with brave Egyptian people they might consider themselves lucky. Paradoxically, importance (to Israel, not to its people) and location of the country keep them safe, otherwise the popular uprising is point when IMF and WB stop to play any role, and military intervention to support local tyranny/system or civil war is ensued.
http://www.ritholtz.com/blog/2011/02/american-warships-heading-to-egypt/
@Jack Rip
“Unless you grow up in the Middle East or lived and made a living there, your chances to understand the region are slim or none.”
Not much here is to be understand. Everybody understand this, and where it is coming from:
Mubarak family fortune could reach $70bn, say experts
http://www.guardian.co.uk/world/2011/feb/04/hosni-mubarak-family-fortune
Very few British people would praise a murderer and sell him weapons. Very few British people would beat up a poor person in order to get cheaper petrol. But our governments do this abroad all the time. Of the three worst human rights abusers in the Middle East – Saudi Arabia, Israel, and Iran – two are our governments’ closest friends, showered with money, arms and praise. Why?
…
In Cairo, there is an area called the City of the Dead. It is a large ancient graveyard filled with tombs. One million families with nowhere else to go have had to break them open and live in the graves. It’s a symbol of the living death the dictators we arm and fund have inflicted on the Middle East. While the people live in coffins, Mubarak’s family buy palaces here in London: I just went to see the five-storey Georgian mansion they own round the corner from Harrods here in London.
=======
Revealed: US envoy’s business link to Egypt
Frank Wisner, President Barack Obama’s envoy to Cairo who infuriated the White House this weekend by urging Hosni Mubarak to remain President of Egypt, works for a New York and Washington law firm which works for the dictator’s own Egyptian government.
…
it is inconceivable Hillary Clinton did not know of his employment by a company that works for the very dictator which Mr Wisner now defends in the face of a massive democratic opposition in Egypt.
So why on earth was he sent to talk to Mubarak, who is in effect a client of Mr Wisner’s current employers?
=======
A private estate called Egypt
Only a thousand families count in a country that Mubarak and his cronies regard as their fiefdom
…
Under sweeping privatisation policies, they appropriated profitable public enterprises and vast areas of state-owned lands. A small group of businessmen seized public assets and acquired monopoly positions in strategic commodity markets such as iron and steel, cement and wood. While crony capitalism flourished, local industries that were once the backbone of the economy were left to decline.
…
the now departed Nazif government decreed that less than $100 was sufficient as a basic income. This, at a time when the prices of food staples and utilities tariffs increased at very high rates.
…
as one local economist asserted, every single commodity and service cost significantly more under the Nazif government – which is the government of business that ended progressive taxation and replaced it by a single unified income tax.
…
Additionally, public social services underwent masked privatisation, taking health and education beyond the reach of vast segments of the population. Many poor families were forced to give up the hope of educating children and had to send them to do menial work to contribute to the income of the household. There was little public investment in most services, and in infrastructure such as roads, water and sewerage.
…
Thugs have become an arm of the police and they have been used as informants in popular quarters of the city. They are rewarded with licences to operate kiosks or run minibus services. In a sense, practices of thuggery have been adopted by the regime to maintain itself and protect the interests of the ruling elite for decades now.
…
Since we have conveniently separated government policy from economics, it allows economists to politely ignore the imperialistic arm of government in support of “American” capitalism. Show me one who ever uses the terms empire or imperialism in the same sentence as America/US….poof, it is just one of those externalities.
This is one of the strong points of ECONNED and the failure of not integrating policy pontifications as a political economy is evident with Egypt.
Furthermore, it is ever higher BS to talk about Egypt getting internationally competitive in a world where the consumption model of the US will NOT be extrapolated to the rest of the world….that epic fail is under way as US consumption shrinks. Countries are racing each other to the bottom in enslaving their populations to less and less wages for participation in the private equity capitalist tit wars.
What a stupid way to run a world. All the wrong incentives, repressive education, no/counter productive social safety net/required participation in giving back to social system as you go along and a hate everybody that doesn’t look like you. And this world is controlled by a nation that in the 50s decided to give corporations the right of citizens and change the motto to In God We Trust. We are now reaping the rewards of that less than humanitarian confluence of Xionists that agreed to have a similar leap of faith in the corporatists that they have in their religion that it is well to trust to those in control.
Where is that damn Rapture when you want it?
http://www.imf.org/external/np/sec/pn/2010/pn1049.htm
This sounds too familiar and ominous to me with awfully lot or euphemisms.
“Egypt made significant progress in wide-ranging structural reforms that accelerated after 2004. This spurred rapid output growth—averaging 7 percent a year during FY2005/06 FY2007/08—underpinned by foreign investment-driven productivity gains and the favorable external environment. Reforms also reduced fiscal, monetary and external vulnerabilities, leaving some room to maneuver on macroeconomic policies in the event of negative shocks.”
Here is where the “Epic Fail” is coming from.
“Under Article IV of the IMF’s Articles of Agreement, the IMF holds bilateral discussions with members, usually every year. A staff team visits the country, collects economic and financial information, and discusses with officials the country’s economic developments and policies. On return to headquarters, the staff prepares a report, which forms the basis for discussion by the Executive Board. At the conclusion of the discussion, the Managing Director, as Chairman of the Board, summarizes the views of Executive Directors, and this summary is transmitted to the country’s authorities.”
Excellent article Yves. Just when I felt hopelessly confused, my questions are answered on NC this morning in a link to the Al Jazeera article; thrilled to finally have a reliable breakdown of Egyptian power dynamics until the conclusion:
The author, Paul Omar:
Terrorist police, anyone? like this also from Omar’s article:
and earlier in the article:
That is, ElBaradei, the humanist and Pulitzer Prize winner, is the man to head up the ” … vast new coalition of local social movements and internationalist Egyptians [to] break into this circle and insist on setting the terms and agenda for transition.”
That would be a new coalition to complete the destruction of Egyptian social cohesion, the acquisition and sale of their resources and infrastructure for personal profits, and control of all people and their enslavement in prisons on the US model of private for profit prisons or, if you prefer, $5.00 an hour jobs for Walmart and their franchise wannabes. OK, $6 or $7. The untrained, unqualified security TSA people, maybe $10 or $11.
How is this a desirable outcome?
Yves answers this question. It isn’t.
but Richard Kline says,
I would correct that to say: ‘the elite organizations have plenty of ‘writing’ talent available to them.’ -toadies all to the status quo, they get through graduate school with a good memory and faithful to their masters, with no time for experiencing anything in the real world; more dependent on wages from whomever to maintain their consumer status than any other group in society.
And finally; Omar, the IMF, and Al Jazeera can work with “Elite organizations [that] could do the analysis …” in tandem wtih Murdoch Media to whatever their sociopathic – talent notwithstanding – hearts desire.
to do whatever their sociopathic – talent notwithstanding -hearts desire.
Kleptocracy is the global norm. You could divide up the world into various economic, geographic, cultural spheres: Central and South America, North, West, South, and East Africa, the Gulf, South, Central, East, and Southeast Asia, Europe, China, Russia, and the US. There is overlap between them. In the case of Egypt, it is Muslim, Arab, North African, and Middle Eastern and what happens there can spill over into any of these zones. And the Suez Canal can influence economies in both Europe and the Gulf and the world economy generally.
But the point I wanted to make is that in a kleptocratic environment blowups can occur anywhere and when they do there tends to be contagion within the zone where the contagion occurs. This is not the first time we have seen something like this. When Greece went, we saw contagion to Europe, the eurozone, and the eurobanks. They are still dealing with it there and it still isn’t clear what if any of these structures will survive.
This time around things started in Tunisia but spread rapidly throughout the Arab world. You better believe that the Saudis and the Gulf emirates don’t see this as just an Egyptian problem. Nor if Europe is any guide is this something that will be quickly resolved.
When kleptocrats are involved it is not about fixing the system but patching it up just enough to allow the looting to continue. This too is why Obama, Hillary Clinton, and the Europeans are all advocating a go slow approach with a “transition” managed by one of Mubarak’s cronies with power even after the “transition” remaining in the hands of the clique that Mubarak headed. You see European and American kleptocrats have much more in common with Egypt’s kleptocracy than they do with the democratic forces there. You see when Obama talks about change in Egypt, this is the same guy who promised change here but delivered only more of the same.
In any case, one country blowing up and destabilizing a whole region is something we should get used to because it is a feature of kleptocracy, the world’s dominant political and economic system.
Nothing new here. I have a copy if the IMFs April 1991 report on Yugoslavia. It said the Yugoslav government was doing a good job fighting inflation, but their budget deficit was too high.
Somehow, I think the Yugoslavgovernment at the time was more concerned about the fact that their country was coming apart than the budget deficit or inflation.
I learned from this to simply assume that the IMF are politically blind.
Reading through the IMF’s solutions to the problems their ideas created reminds me again: Supply-side economics created the problem, so more supply-side economics are only going to make them worse.
Trickle-down economics is a lot of things: it’s a faith, an academic theory, a foot in the door to a good job, a license to steal, a cover for crumb catching, a social paradigm, a bad religion, a fig leaf for corruption, a snob badge, an oath of fealty to the wealthy, and so on. What it’s not is a functional economic program.
Listening to Barry try to josh the wealthy at the Chamber of Commerce away from unalloyed greed to returning some of the social good they depend on, I’ve concluded it’s also rhetorical begging. His lickspittle wheedling legitimizes their social strip mining. He could have chosen a less embarassing head fake to counterfeit moderate politics, but grovelling puts jobs and sustatinability into the realm of gifts from on high.
This article is an excellent companion piece to another article on the Web of Debt Blog: http://webofdebt.wordpress.com/2011/02/03/the-egyptian-tinderbox-how-banks-and-investors-are-starving-the-third-world/.
The depths that the transnational elite will sink to for a buck (ok, billions of bucks) is nauseating.
Where does the IMF stand according to Iraq as of Feb 7th, 2011?