Wednesday, May 19, 2010

What will the IMF loan mean for Fiji's future, IF it eventuates?

Since April 2009 we have been hearing from the ILLEGAL Self-appointed PM Bainimarama that the IMF will be assisting his regime's planned reforms with a loan, which may amount to F$1 billion.

Although we know that being a third world country we will always rely on loans, funds and aids from overseas to maintain our economy, what we don't agree with is the fact that the IMF is dealing with our country's military dictatorship to secure these loans for their so-called reforms. But this shouldn't be a surprise to anyone because the IMF has been known to provide BILLIONS of dollars to dictators around the world. Moreover, it has been recorded that when IMF lends to a THIRD-WORLD country like Fiji (or Jamaica, as it found out in 1995) skeptics have observed that IMF involvement is not necessarily helpful to a third world economy.

Now, if we look carefully at the IMF organisation, we know that it relies on donor countries for their revenue, which they then lend to countries that borrow, so they can be assisted. But it must also be known that like any lending organisation, these loans must be paid back, with interest. In the past, the IMF has been falling short of maintaining their own operation costs because of the economic situation of the world, in addition to some donor countries like the USA, now wanting to diminish their contributions to the IMF funds, and also loan receiving countries like Brazil and Venezuela, paying off their loans in time, thus not having the obligation to pay the hefty interests that enables the IMF to do what it does.

But the IMF doesn't just lend money, they also provide "technical assistance to countries in need. This assistance takes several forms: Educational and personnel training to help the particular country implement effective economic policies, statistical research to help the IMF pinpoint the individual country's needs, and, most importantly, IMF experts remaining in the country for a period of time to advise the government on its economic and structural policies."

Now we know that the IMF has been having talks with the regime since 2009. And since no loan has materialised our bet then is that, the IMF has only been providing technical assistance to the regime. And this assistance IS NOT FREE!

As Mr. Crockett, Chair of the Eminent Person's Committee said in the Crockett Report, which is the Final Report by the Committee to Study Sustainable Long-term Financing of the IMF (http://www.imf.org/external/np/tr/2007/tr070131.htm)

"the provision of technical assistance and capacity-building is an important function of the Fund. It benefits not only the countries that receive it directly, but it benefits the stability of the international monetary system. And even the countries that receive it are of course in many cases low-income countries that might not easily afford the rates of charge. So within the report we have recommended that the Executive Board of the Fund should look carefully at this issue with a view to preserving the utility of the technical-assistance and capacity-building services it provides, making sure that they are not shortchanged by the unwillingness of countries perhaps to pay the charge, but at the same time to review the incentives in such a way that the technical assistance is best targeted and does not involve excessive use of resources.

You see here, the IMF knows the dire state of our economy and that this regime, at this stage can only afford the rate they charge for technical assistance. So, they don't want to excessively waste their resources on something that may be a LOST CAUSE! And this was proven in the US's recent statement of not wanting to offer their hard-earned taxpayers' dollars to a regime that is not working hard enough to curbing human trafficking, but in our eyes most importantly, this is a regime that STOLE power and one that has been working like a group of hard-knocks for their own self-preservation.
But our question would be: Which funds have been affected, so this regime can pay the rate charges for the IMF's technical assistance, thus far? Is it the students of RKS whose dining room has not been fixed, or more likely EDUCATION for our children as a whole?


References: 
http://www.uiowa.edu/ifdebook/briefings/docs/imf.shtml
http://en.wikipedia.org/wiki/International_Monetary_Fund

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