Max, yup, a great scam eh? Don't take it from me, you can check even the numbskull Anne Kruger's comments on this in her quick-and-dirty Meltzer paper (on their website). Also check the current issue of Multinational Monitor, where Stiglitz fumbles hopelessly when Rob Weissman puts it to him that countries don't need forex for "development" projects (one of S's top chaps told me last week that our hero hasn't really got a well-formed opinion here... if he did he'd have to give up his WB consultancy, one suspects, or his integrity).
Chuck, nope, I would say that "foreign investment" means mainly assuring that the commercial banks which lent during the 1970s and investment houses which came in during the mid-1990s get repaid in forex, under the cover of WB structural adjustment programme and project funding. "Foreign investment" in terms of FDI plant/equipment (in the productive circuitry of K) is still pretty small beer, compared to the role of the WB supplying forex for debt and portfolio investment repayments. No time right now to do the numbers; maybe Doug will help.
Then again, there's also the post-development (post-structuralist) critique of WB programmes (Escobar, Ferguson, Sacks, Shiva) because they promote institutional power under cover of "development discourse."
Anyhow, it's long overdue that policywonk comrades formulate an alternative local development financing model -- combining capital controls, reflationary monetary policy and financial repression, prescribed assets for local-currency development projects, democratised trade finance, and a general shift in power away from rentiers/speculators -- which can help make the case for shutting the WB and IMF once and for all.
Brad, just close your eyes and pretend you're not here, ok?
Cheers!
P.
> From: Chuck Grimes <cgrimes at tsoft.com>
> Max: ``Patrick, Please expand on this, if you have time. Are you
> saying WB/IMF aid is funding jive social infrastructure programs w/no
> payoff hence weakening the country's foreign exchange position?''
> Chuck:
> I more or less assumed the only purpose of the WB/IMF is to fund
> programs, projects, and development or implement policies that promise
> return or supports to foreign investment; hence such foreign interest
> and investments function as a form of collateral in the absence of
> any other form for loan repayment.
>
> Is this impression true or false?
>
> Chuck Grimes