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Colonial Loans

Autor:   •  February 22, 2019  •  1,904 Words (8 Pages)  •  51 Views

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Some government claims that by taking the loans from IMF they may aim to show the investors that they can be trusted as such an international organization believe in their regime's ability to develop the country ,but from the point of view of IMF the loans to be given is not only under financial and economic condtions,it is also strongly linked to the political policies of these counties ,the IMF will tend to approve loans to counties with strategic political and financial interests that coalesce with those strategies and interest of the big member counties controlling the votes of IMF.Also the financial strategy in the conditions IMF imposes on the counties of credit is considered to be one of the main factors that make them under the influence of the lending counties. The IMF concerns about the investors interests as its only goal behind giving these loans is to make a profit and redeem these loans on its due date ,it did not give a thought to economic development of the country and the priorities of the projects that will help the people in their life like giving them the proper education or health care .The IMF only focus on projects in certain field like agriculture ,energy and infrastructure ,that are usually funded by the loan through partner companies in the lending countries, (Perkins, 2004) not on the industrial projects that are considered the backbone of economic development so they will always be dependent on others. Even in the agriculture projects they focus on funding the project that aim for exporting to get foreign currency instead of the ones that will help the country be self-sufficient of the basic nutritional supplies (Gros).Focusing on the projects that will actually help the economy of the country instead of being compelled to do some projects that may not be of great priority to the people is why the country need to have its own influence over its own projects, they know what is best for their people ,they can take consultation or leading examples of other countries but they are not forced to follow certain projects or certain companies only because the IMF demanded that in its conditions

Many experts advise the countries to try to pay its own current debt through taking these loans but that will only result in aggravation of the external debt so the counties will keep on being dependent on the external financing making them more obedient to the IMF and the conditions imposed on them economically and politically , jeopardizing the liberty of the decision makers in these counties ,as they will be forced to go with the policies instructed by the major lending counties instead of making the decisions that will benefit their own country (Buira, 2003).of course taking loans to pay an existing one is not a solution ,it is like taking a painkiller without treating the actual cause of the problem .It is better to try generate money from internal sources rather than being dependent on other countries or institutions to pay the debt .

Although the foundation of these huge international organizations such as the IMF or the world bank may seem to be for a good cause that is to help regulate the financial world in which all the trades happen and force some order to the capitalistic market, though they may offer a lending hand to developing countries or those who are in crisis ,the conditions they impose pours only in the interest of paying the loan and the interest of the big multinational corporations that controls the IMF with their votes .It does not work in the interest of the country in debt. Every country should depend on its resources to rise and develop .it’s a great thing to take consultations from other institutions but no one should force their opinion on the government or the people .We should listen more to the voices in favor of domestic development instead of using the poisonous back door solution of taking fast easy money in the form of these colonial loans

Preferences

Buira, A. (2003). Challenges to the World Bank and IMF,Developing Country Perspectives. Anthem Pres.

Gros, J. a. (n.d.). When Reality Contradicts Bank Lending Practices in Developing. 2005: Codersia Monegraph.

Katasonov, V. (2014). Interest: Loan, Justiciable, Reckless: "The Money Civilization" and the Present-Day Crisis. Outskirts Press.

Peet, R. (2003). UNHOLY TRINITY . zed books london ,newyork.

Perkins, J. (2004). Confessions of an Economic Hit Man . Berrett-Koehler Publishers.

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