each year 11m Third World children under age 5 die*

Doug Henwood dhenwood at panix.com
Thu Jun 4 09:13:25 PDT 1998


Les Schaffer wrote:


>how exactly does this happen? if the IMF comes in and pumps a ton of
>money into the system, i take it that the IMF then imposes a specific
>payback schedule on the loans. when they pump money into a place like
>mozambique, does the economy GROW by some significant fraction that in
>'theory' ('practice') should (does) allow mozambique to cover the debt
>without diggin into other pockets, or are the IMF debt schedules
>CLEARLY SET UP in such a way that the receiving nation MUST dig into
>its other monies (which would otherwise have gone to health care) in
>order to make the payments?

The IMF has a strict payback schedule for the money it lends, but don't forget that Mozambique (and scores of other countries) have lots of creditors other than the IMF. Africa has mostly official creditors (national development agencies and multilateral institutions like the World Bank), but Latin and Asian countries also have private creditors (banks and bondholders).

The IMF coyly says it imposes no priorities on its vassals, but in practice its programs are offers that can't be refused. Do it our way, or go under. I once had a long talk with a guy who used to work in the Jamaican treasury under Manley. He was very passionate in recalling what it was like to *have* to come up with $100 million in hard currency next week to pay for essential imports like oil or food. So the choice is often between the IMF and complete penury.

Of course, the rulers of the debtor countries like being the junior partners of the big bourgeoisie, so they're not about to break with the IMF and suffer the consequences. But even if they did want to, there are very substantial constraints. A big country like Brazil has a lot more wiggle room than a small one like Mozambique, but unless there's some concerted action by a significant number of debtor countries, they're in a very weak position.


>I came here mainly to listen (cf. doug's lbo-talk/excel ledger) and
>learn some more about economics, some history, ways of analyzing the
>movement of people, companies, countries, and how people organize in
>their political lives. i get the feelin many of you who write a lot on
>this list know each other from countless aeons before, and your
>writing style shows. what i am getting at is this: it would be nice to
>us 'learners/beginners' if when you write a piece, you don't always
>suppose we are all at the same advanced level as you, eg. throwing
>darts at 'imperialist greed in Mozambique' cause you 'just plain know'
>that its imperialist greed working in this case. some of us (or is it
>only __me__?) want to know specifics, details, whats 'really going
>on', rather then simply reading the MHN (thats my abbrev for the
>Marxist Headline News: 'IMF/imperialist greed kills 11m in mozambique,
>film at 11!).

If someone says something incomprehensible, call him or her on it. It's easy to fall into shorthand, especially in an on-the-fly medium like this, but there's no excuse for obscurity.

Doug



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