The Reasoned Review

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Cancel Haiti’s Debt!

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Richard Kim makes a lot of sense on Haiti in The Nation:

Now, in its attempts to help Haiti, the IMF is pursuing the same kinds of policies that made Haiti a geography of precariousness even before the quake. To great fanfare, the IMF announced a new $100 million loan to Haiti on Thursday. In one crucial way, the loan is a good thing; Haiti is in dire straits and needs a massive cash infusion. But the new loan was made through the IMF’s extended credit facility, to which Haiti already has $165 million in debt. Debt relief activists tell me that these loans came with conditions, including raising prices for electricity, refusing pay increases to all public employees except those making minimum wage and keeping inflation low.

Yes, leave it to the IMF to use this earthquake to force even more draconian “market-friendly” reforms on Haiti. The time will soon come, I hope, when “developing” countries realize that IMF loans are a scam designed to wrest their sovereignty from them. Under the guise of “development” and “helping” the “third-world”, the US-driven International Monetary Fund has repeatedly and consistently used their position to manipulate “third-world” countries into enacting reforms designed specifically to benefit the United States at the expense of their own population. The concept of “international loans” must be replaced with a “grant” system – most of the countries now indebted to the IMF have literally no prospect of paying back their loans, and in many cases the interest alone is greater than their GDP.

Further, the IMF forces repayment of what many call “odious debt”. If your country has been ruled for the last few decades by a despotic and insane dictator who racked up IMF debt to finance his own extravagant lifestyle and pay his soldiers (who, in turn, keep the general population impoverished and frightened), and you then overthrow this dictator, do you still owe the IMF money? According to them, yes, yes you do – and they will use this leverage to force you to compromise your newly-won freedom. A cursory look at the post-Soviet history of Poland, the post-Apartheid history of South Africa, or the modern history of Haiti itself should make this point abundantly clear.

This tendency becomes doubly painful when one learns that the dictators squandering the IMF ‘loans’ were installed by the US in the first place. This is especially true of Haiti (vis-a-vis the Duvialier duo), but also of Chile, many of the post-Soviet dictatorships (including Khazakstan, Turkmenistan, Afghanistan, etc.) and post-colonial African dictatorships (like the former Zaire, and countless other states). The deal here is too cynical to believe. The United States, with its magnificent CIA, move into a “turbulent” area and install a dictator. They then instruct the dictator to take out large IMF loans for “development”. Much of the money goes into the dicator’s pocket, but a significant portion goes back to the US, in the form of “contractor services”. Then, when the dictator is overthrown, the long-oppressed people find that they owe the IMF however many billions of dollars, and they have no way to pay it back. Enter the US and repeat – ad horribilis.

A more successful neo-imperial enterprise, one could hardly imagine!


Written by pavanvan

January 17, 2010 at 4:00 pm

One Response

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  1. I believe tactics of this kind bring to light a known problem with the current financial world structure. When mobsters give high loans or loans with high interest to someone who is known to have a gambling problem it’s called predatory lending and it’s illegal; When it’s done on a much larger scale as described here in this weblog, I call it financial entrapment and in time it becomes financial dictatorship or even financial slavery. After the global economic meltdown of 2009 I can’t decide if there was/is any malice on the part of the IMF or the US by giving out big money without questions, since it has been happening in the US between financial Giants. One thing I know: these loans were all made under known dictatorships, the public was unaware of any such dealings nor did they have the right to have a referendum on the issue of those massive loans or have any say on how they would be spent to develop the country into a viable economy capable of repaying the debt. For these reasons among many others the loans taken until 1986 when Duvalier Baby Doc Left should be cancelled. The IMF should take steps to recover from the Swiss Bank any amounts left in those Duvalier numbered accounts. Any other loans after that should be put at a 0% rate for the next 10 years while Haiti rebuilds.

    Haiti needs to have all current embargo lifted in order to grow and the right to protect all their local agriculture and industries. Massive forestation projects are needed to prevent flooding.

    Due to the history of corruption, and without accusing any officials of such things any new loan should have their use micromanaged by a firm of foreign observers and accountants and daily and weekly reports of work done and cost televised. Spending outside of the public interest would stop funding instalments and start a corruption investigation.

    i would not expect any less if I owned a large company that took a multi-million dollar loan and some of my officers were playing with our money. Haitians need to get the biggest bang for their buck and if this money will restart the heart of Haiti great, but I don’t see how a fully loaded Mercedez or Range Rover to high placed officials would be helping starving Haitians.

    We need to train anyone in power in Haiti the meaning of accountability and responsability to every single Haitian.

    Patrice Liautaud

    January 26, 2010 at 9:49 am

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