IMF Bogs Down Arab Revolt, Reinforces Imperial Policies

Over at Econlog, Arnold Kling directs us to this interesting and much needed article arguing that the IMF has “outlived its purpose.” Excerpt:

Now, before Tunisia and Egypt even have new governments in place, the IMF has jumped to offer them loans for vast infrastructure projects in the desert—as if the fund didn’t know that young Arabs there want ways to start businesses and have careers, not temporary construction jobs.

The Greek debacle and the North African drama raise existential questions about the IMF. Responsible governments have no business borrowing vast sums from abroad, rather than from domestic sources. That’s what tinpot regimes do. And lending even more to borrowers who can’t pay what they already owe? That’s what loan sharks and mafiosi do.

The IMF’s business model sabotages properly functioning capitalism, victimizing ordinary people while benefiting the elites. Do we need international agencies to enable irresponsible–verging on immoral–borrowing and lending? Instead of dreaming up too-clever-by-half schemes to stumble through crises after they happen, why not just stop imprudent banks from accommodating foreign borrowing by feckless governments?

The piece is good in its entirety, so do read it.

One of the many reasons IMF/World Bank policies tend to exacerbate the problems that countries experiencing this Arab Spring face and have faced is because they help legitimate the state officials of Arab tyrannies (so long as the U.S. legitimates them too) by (1) implementing doomed Keynesian booster-programs and (2) orchestrating top-down policies that these tyrants then use to their advantage. I blogged a bit about this back in May, but here is Austin Mackell at the Guardian in the same month:

The new loans being negotiated for Egypt and Tunisia will lock both countries into long-term economic strategies even before the first post-revolution elections have been held. Given the IMF’s history, we should expect these to have devastating consequences on the Egyptian and Tunisian people.

[The IMF] would rather make backroom deals with Mubarak-appointed finance minister, Samir Radwan, and the generals currently running Egypt who are themselves members of an the economic elite that sees its privilege threatened by the approach of democracy.

Mackell discredits himself by citing the economically illiterate Naomi Klein later in the piece, but it is important to note the overlap here. Those opposed to the Western imperialism that has in many ways held back the entire region should rightly oppose the economic technocrats attempting to pull the levers from their outfits at the IMF and World Bank. And those who understand that economies free from the white-knuckled grip of these dictatorships (again, many propped up by the U.S.) would empower and improve the lives of these populations should oppose what these international economic agencies do, which is falsely branded as imposing free market policies.

17 thoughts on “IMF Bogs Down Arab Revolt, Reinforces Imperial Policies”

  1. Though the fake word "malinvestment" did not appear here this sounds like more Austrian madness, or is the author an extremist neoclassical marginalist.

  2. It's unfortunate but true the IMF and the World Bank are used as tools of the western governments and the US in particular. The loans which can't be paid back are used as leverage to keep these nations under our control. He who controls the supply of money controls the nation. It's one huge scam and it can get really ugly if they dare default. The outcome makes kneecapping seem like a trip to the beach.

    A great book to read is Confessions of an Economic Hit Man written by John Perkins.

  3. The IMF doesn't implement Keynesian policies. Quite the contrary the IMF implements severe austerity measures that harm third world countries. Look what happen to Argentina and Estonia. Argentina went through a depression and they only got out of it once they defaulted on their debt and rejected the IMF.

    Estonia was forced into austerity and reduced their government by 10% but lost 30% GDP in the process.

    IMF is as right wing capitalistic free market as you can get. I know that this is a libertarian sponsored website but this is the truth. The IMF is a haven free market failure.

  4. Sorry But a link to the CATO Institute of all things only serves to discredit your article.

  5. The article from CATO Institute is written by Johan Norberg. He's well known in Sweden and is only cited by the people furtherst to the right on the political scale. To quote him is a good way to loose credibility.

  6. The IMF has a very long record of creating more problems than they solve. The Soviet Union funded major projects in the desert and that did very little for the nations. What is needed is real development of the economy of the nations but if they funded that they would not have the political power that they can hold over if they fund projects that have no real use to the country. The world would be a better place without the world bank or the IMF. They are product of aggression instead of development. They are money wars instead of bullet wars.

    1. Why should that matter? If anything, a degree in economics only proves that you have the IMF/NWO mindset when it comes to evaluating the world.

      Identifying the problem is the first step, and you've done your share to help us arrive at awareness of the true culprits to our contemporary problems. But proposing solutions that are based on flawed or failed policies, as you often do, is counterproductive.

      Study Austrian economics, please.

  7. What the hell is a Keynesian booster program? Speaking of economic illeteracy…

    The IMF has to go. Shoulda stopped there.

  8. Naomi Klein exposed the ruthless economics of the Chicago boys, all fundamentalist followers of Milton Friedman to whom a Nobel price was awarded. It should have been shared by that greatest of Chicago economist whose model Milton Friedman applied on a global scale: Al Capone.

  9. IMF is there to dictate to those that barrow money from it what to do and where to spend that money.., much of the money is wasted on the past due interests.., it is a organizations where almost every country that are called "rich country" involved.., from Saudi Arabia to Israel and from France to US.., here what is needed is the creation of nations being independent and not bound by Euro or US dollars but rather have their own currency valued by what the country produces and how the country is managing the creation of jobs, education, healthcare, using its natural resources for the benefit of its people and the country…, IMF is like the US and EU given away money system where countries that money is given to have to buy US or EU product or the military products…, where such politics makes that country totally dependent on US or EU economy.., Greece, Spain, Italy, Portugal, Ireland and Eastern European countries are just an example.., soon if the trend will continue the Northern European countries such as Sweden, Denmark and Finland will fallow and experience the same faith…, many of these countries totally depend of truism from EU and US but when “recession” hits then there is no tourism and there agricultural product simply can not compete with bigger countries and larger productions capacity nor their industry products.., here is where the hypocrites’ from IMF comes in to steal what is left of a country.., again Greece is just an example.

  10. "She also argues that Thatcher used the Falklands War as cover for her unpopular economic policies, when actually those economic policies and their results enjoyed strong public support."

    Utter drivel. If you want to discredit Klein, you need to link to link to somebody with a grasp of reality.

  11. By US government.., Hillary Clinton from state department.., declaring the Libyan rebel as the legitimate government of Libya.., US, China, France and England can steal the Libyan peoples money making the stealing a legal matter.., Libyan rebel in the other hand need to produce more oil.., change the entire economic system and cooperate with IMF to get some peanuts in return…, this is the new trend in world domination by US and EU militarism regime and that's.., sooner or later.., where IMF is known to get involved slashing the free education, healthcare system, pension and all other social benefits that is given to Libyan people.., as they did in Iraq.

Comments are closed.