Tag Archives: IMF

Introducing Greece’s new PM Lucas Papademos

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“euro area financial system is robust and well-capable of withstanding shocks…balance sheets of…banks…have continued to strengthen” [Lucas Papademos, ECB Financial Stability Review June 2006]

Papademos has an interesting CV, one that is lovingly glossed over by the BBC:

BBC: “As head of the Bank of Greece, he oversaw his country’s move from the drachma to the euro in 2002.”

Alternative: “Papademos was head of Greece’s Central Bank when Goldman Sachs were helping “the Greek government to mask the true extent of its deficit with the help of a derivatives deal that legally circumvented the EU Maastricht deficit rules“.”

BBC: “More recently, as an adviser to outgoing Prime Minister George Papandreou, he took part in the negotiations between Athens and the “troika” of international creditors (the IMF, the European Commission and the European Central Bank) bailing out the Greek government.”

Alternative: “Papademos served as ECB Vice President, before taking advisory roles, firstly with the IMF as part of it’s “Regional Advisory Group: Europe” and then with former Greek Prime Minister George Papandreou. Writing in the Financial Times recently, Papademos said ‘Forcing Greek restructuring is not the answer’.”

BBC: “After a stint at Columbia University in New York, Mr Papademos returned to Greece where he joined the central bank as its chief economist in 1985.”

Alternative: “Papademos served as Senior Economist at the Federal Reserve Bank of Boston in 1980.”

Wonder whether this “fiscal conservative” will have the Greek people at heart or his illustrious former employers.

Post-Harigate

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[Edit 16/09/11: Hari has this week made a public apology to his readers (presumably the trusting ones), almost going on to admit that the fabrication of quotes (not) spoken to him in interview was wrong, but in the end not. There’s probably been a number of attempts to analyse Hari’s statement, I’ve seen a few, most of them poor, but this one from Jonathan Cook is essential.]

This is a response to this discussion over at the Media Lens Message Board.

I plugged an inconspicuous line from Hari’s article (Jun 2011) (relating to his principle case study) into Google, ‘IMF found out the Malawian’, and the first result is a link to a topic on a chat forum. The first post (dated Jan 2011) on the page is a complete copy and paste of this article (dated Oct 2009).

Now I could be biased here, because I’ve never been a fan of Hari’s work, but I seem to be finding similarities between this article by Kat Hobbs and Hari’s. There’s no direct (and unreferenced) quotation, but the paragraph distribution and formulation bear a striking resemblance. I don’t think this constitutes plagiarism, but it does show that Hari, at least, appears to have drawn heavily on this one source in creating his narrative. To be fair to Hari he seems to be simply repeating a timeline, but the structuring of the paragraphs, especially the one beginning “The next year, the crops failed.” suggest he takes a fairly, well, formulaic approach to writing his columns. In Hari’s defense (not that he necessarily needs it) the selected paragraphs from his piece contain other research, commentary and quotations.

For example:

Hari: “They said they would only give assistance if Malawi agreed to the ‘structural adjustments’ the IMF demanded. They ordered Malawi to sell off almost everything the state owned to private companies and speculators, and to slash spending on the population.”

Hobbs: “To find the roots of the crisis, you have to rewind- back to the beginning of Malawi’s ‘development’ programme, when the World Bank and IMF began their roadmap to create prosperity. The grand plans rested on one key move, the darling of neo-liberal economists; the euphemistic ‘Structural Adjustment’ programmes. […] The IMF and World Bank ‘advised’ the government to privatise everything it could lay hands on, keeping faith in the saving grace of the markets.”

And:

Hari: “So when in 2001 the IMF found out the Malawian government had built up large stockpiles of grain in case there was a crop failure, they ordered them to sell it off to private companies at once. They told Malawi to get their priorities straight by using the proceeds to pay off a loan from a large bank the IMF had told them to take out in the first place, at a 56 per cent annual rate of interest. The Malawian president protested and said this was dangerous. But he had little choice. The grain was sold. The banks were paid.”

Hobbs: “There was also, they pointed out, the small matter of a $300 million loan the IMF had advised the government to take out from a South African bank that needed to be paid back. By the end of 1999, NFRA had 167,00 metric tons of grain stored. The Banks demanded its sale, waving the loan papers; the government obeyed. The grain reserve was sold to neighbouring states such as Kenya, or released onto the domestic market, causing the price to begin to fluctuate dangerously.”

And:

Hari: “The next year, the crops failed. The Malawian government had almost nothing to hand out. The starving population was reduced to eating the bark off the trees, and any rats they could capture. The BBC described it as Malawi’s “worst ever famine.” There had been a much worse crop failure in 1991-2, but there was no famine because then the government had grain stocks to distribute. So at least a thousand innocent people starved to death.”

“At the height of the starvation, the IMF suspended $47m in aid, because the government had ‘slowed’ in implementing the marketeering ‘reforms’ that had led to the disaster.”

Hobbs: “And then disaster struck: the rains failed. The government, having been told to sell off the grain reserve, had nothing to offer; international donors, including the World Bank and the IMF, expressed shock and horror at the unfolding crisis. Where, they asked, was the grain reserve? They turned on the government that they had funded and advised, accusing it of corruption and irresponsibility. Aid would be withheld until the grain could be accounted for. Between October 2001 and March 2002 the price of maize shot up by 400%. At the same time, in spring 2002 and even when the resulting famine led to the death of approximately one thousand people, the IMF suspended $47 million in assistance on the grounds of ‘inadequate implementation of its reform programs’…”

And:

Hari: “Then, in the starved wreckage, Malawi did something poor countries are not supposed to do. They told the IMF to get out. Suddenly free to answer to their own people rather than foreign bankers, Malawi disregarded all the IMF’s ‘advice’, and brought back subsidies for the fertiliser, along with a range of other services to ordinary people. Within two years, the country was transformed from being a beggar to being so abundant they were supplying food aid to Uganda and Zimbabwe.”

Hobbs: “And then Malawi dared to do something which has been virtually unheard of in sub-Saharan Africa, dependant as that region is on the goodwill of powerful development companies. In 2005 the government decided to defy the World Bank and the free market advice that had brought them to the brink of ruin. They re-introduced fertilizer subsidies and starter packs, and began supporting the farmers that comprise 70% of the population. In the words of Celia Dugger in the New York Times, “Over the past 20 years, the World Bank and some rich nations Malawi depends on for aid have pressed this small, landlocked country to adhere to free market policies and cut back or eliminate fertilizer subsidies, even as the United States and Europe extensively subsidized their own farmers. But after the 2005 harvest, the worst in a decade, Bingu wa Mutharika, Malawi’s newly elected president, decided to follow what the West practiced, not what it preached.”[11]”

“Malawi still has a long way to go before it will be food secure; the unstable climate of the region, combined with a lack of diversity in farming practice, leave it vulnerable to sudden shocks. However, in the two years following the re-introduction of the subsidy, Malawi went from a beggar nation reliant on foreign aid to a net producer: by 2007 it was selling more food to the World Food Programme than any other southern African country, and exporting thousands of tons of grain to neighbours such as Zimbabwe.[12] Refusing to bow before the power of the free market, Malawi has begun a long, slow road to independance.”

The Finance Bill, there is no alternative

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Even in the absence of a functioning government the Irish Times continues to campaign relentlessly for passage of the Finance Bill, a move that will seal “the abnegation of our economic sovereignty“.

Both the parties and media pundits realise that if the bill is not passed before the Dáil is dissolved it will be rejected by the public in the election.

“Today’s controversy will surround the enactment of the Finance Bill. Minister for Finance Brian Lenihan claims that it would be logistically impossible for him to get the Bill through the Dáil by Friday. The normal timetable for the passage of the Bill would be the end of March. The main Opposition parties, now including the Greens, want it done by Friday so that the election can be called. It is worth remembering that this is no normal Finance Bill. Rather, it is the domestic requirement to satisfy the terms of the bailout by the International Monetary Fund and the European Union. There is little wriggle room in this Bill for any party, including Sinn Féin. All of the hours of debate in the world won’t turn back the clock on our loss of sovereignty.” [A time for reckoning, 24/1/11]

“The Green Party will now be on the Opposition benches along with Fine Gael, the Labour Party, Sinn Féin and a number of Independents. The challenge facing all of them is to find a way of ensuring that the Finance Bill is passed over the next week or so, despite the absence of a government. All agree with Fianna Fáil that the Bill should become law before the general election begins. The problem is that there is a serious difference of opinion between Fianna Fáil and the rest as to whether it can be done.” [Drama far from over as FF seeks to pass Finance Bill, 24/1/11]

“AT ANY other time, the publication of the Government’s Finance Bill might be expected to generate much discussion and debate but the current political turmoil dominates the media to such an extent that the Bill published yesterday is little more than a sideshow. However, the Finance Bill, which will put into legislation the measures announced in last month’s Budget, is the only reason the Government is still in existence. If there is one major item that Fianna Fáil and the Green Party are still in agreement on, it is that the Finance Bill must be passed by the 30th Dáil. Most of the significant measures in the Bill are necessary to fulfil the terms of the bailout that the Government negotiated with the European Union and the International Monetary Fund. This State no longer has sovereignty over its fiscal policy and it will not reclaim it until many years have passed and many billions of euro have been repaid.” [Bill is tough but necessary, 22/1/11]

“The Green Party is standing by its commitment to remain in Government until the Finance Bill has been passed. It hopes that climate change and other legislation can also be secured. Spurred on by the farming and business lobbies, Fianna Fáil backbenchers are preparing to revolt over carbon control legislation and in the circumstances, Mr Cowen is unlikely to upset them any further. Political observers have suggested that Mr Gormley would have improved the party’s chances of avoiding annihilation in the election had he left Government, offering to support the Finance Bill from the Opposition benches.” [What a difference a day makes, 21/1/11]

“Passage of the Finance Bill will bring the 30th Dáil to an end. That legislation is due to be introduced next week. While the Opposition parties have offered to facilitate its speedy passage, Mr Cowen is sticking with traditional timing, much as he did in rejecting EU pressure to introduce an early Budget. The upshot is likely to be a late February/early March completion date. In the meantime – and in spite of grumbles of “jobs for the boys” from the Green Party – the Taoiseach is likely to refresh his Cabinet by replacing Mr Martin, Mary Harney, Dermot Ahern and perhaps others who have announced their retirement.” [Deckchairs on the Titanic, 20/1/11]

“The Opposition parties should guillotine the passage of the Finance Bill and bring on the election.” [They are where they are now, 19/1/11]

“As political events unfold, it might be in the national interest for Fine Gael and Labour to agree that they would guillotine the Finance Bill through the Dáil and Seanad – if their primary aim is to have a general election as soon as possible.” [Fianna Fáil convulsions, 17/1/11]

“This amounts to an unwillingness to face the electorate. Only one piece of legislation is required before the Dáil is dissolved and that is the Finance Bill. It could be enacted quickly if the political will exists.” [Edging towards a general election, 8/1/11]

“THE NEED for a general election at the earliest possible opportunity has increased, rather than diminished, in the aftermath of the Budget. There should be no question of a long, drawn-out debate on the Finance Bill in the New Year or waiting until special legislation on climate change or corporate donations has been adopted. The sooner the electorate is given an opportunity to shape the political future of this State, the better. We are at debt’s door and it is simply not good enough to revert to party politics.” [Election required as soon as possible, 10/12/10]