Let Me Adjust My Blinkers: Is The IMF The Problem?

I am always fascinated by people's attitudes towards the IMF and its policies. Not really a surprise given that I worked for them for nearly two decades. What always fascinates me is how the thinking about IMF policies never start at the beginning, but goes straight to the end. It focuses on what the IMF is proposing, and rarely looks at why it's being proposed. It focuses on certain negative consequences, but never seems to find any positives.

I read another example of this yesterday in the latest Hartley Henry column, Public Contradictions…the order of the day (see Advocate column). As an aside, I noted that the column was again taking to task the leader of the opposition. I note that this column speaks more about the opposition than it ever does about the government. I guess that legitimate for the government's senior political advisor. But it's a strategy of clear 'negativism'. Why does the column not focus on what the government has been trying to do and address the challenges that it faces in getting its policies to succeed? Must the discussion be about what the latest failings are of the opposition? I mean, who is in power and running the country? But I also wonder about the clarity of think that has the government's senior political advisor able to write 'most of us who are not blinded by partisan, political subjectivity...'. Mirror, mirror on the wall...

Anyway, back to the script.

I was struck by the following passage from Mr. Henry's comments:

'We know from past experience that the IMF’s prescriptions are almost always harmful to the social fabric of society. Their recommendations have hardly differed over the years. When once you hear IMF, you are likely to hear of layoffs, tax increases, hikes in utility rates and a cessation of social services and conveniences. That perhaps explains why its most recent report on Barbados and its list of recommendations did not generate a significant stir, because to many objective onlookers, it was a case of more of the same. Once there is a threatening or even challenging situation, the IMF’s prescription will be the same.'

The first point is too tendentious to bother with. But I will let them swirl awhile: "...almost always harmful to the social fabric of society..." Like stopping politicians swindling their people? Like stopping public servants feathering their own nests and those of their cronies? Like getting countries to spend less on military equipment and more on education and medical care? Like stopping companies avoid tax obligations? Like stopping people taking foreign exchange out of the country illegally when international reserves are dwindling? Hmm. "Almost always..." I guess it's a point of view.

All the concerns are about the 'pain' the IMF's recommendation would inflict, never once going to why the recommendations may be necessary. All was rosy and hunky dory till the IMF came a knocking at the door? Why do you fear 'layoffs, tax increases, hikes in utility rates and a cessation of social services and conveniences'? Could it be that people were employed for political rather than operational needs, and that some if not many were not suited for the jobs? Could it be that revenue needed to be higher to pay for these people? Could it be that the costs of producing utilities had not been matched by the prices charged and the entities concerned were getting into a deeper financial hole? Could it be that the 'social services and conveniences' were being provided inefficiently or ineffectively and were not meeting the needs of people and not having any or much of their costs met by fees paid by people who could afford it? These are just some questions that came to my mind spontaneously. In other words, how can stand and criticise solutions when you do not look at what may be the possible problems? The IMF has landed like a buzzard on a healthy body and started to eat away at its flesh? I think not. We often find that a lot of rottenness exists in the state of 'Ruritania' but no one wanted to handle the putrid stuff. Better still, there was much bickering about whose fault it was. I read stories in Barbados of so many 'black hole' government projects (i.e., activities for which there is no clear accounting and often no clear activity) and wonder if people ask where is the money? What did it do? How will it be repaid? Or do they just go along like kids with snow cones enjoying the sweet sugary taste and not watching the syrup drip all over the Sunday best? Someone will clean up the mess.

I was in a conversation a few nights ago about the IMF's renewed love affair with Jamaica. PM Bruce Golding had just made statements about how the budget needed to be cut further and flagged tax increases, ... and that he would cut some Cabinet positions. My basic point was that Jamaica was suffering because money it had borrowed over the decades had mostly been spent on things for which we could not see tangible gains. Moreover, the borrowing had been done with little to ensure that it would produce means to repay it. The result? Jamaica is facing having to pay some 60+ cents of every dollar of revenue to meet debt service. It is having to borrow to repay past loans. But politicians were constantly being let off the hook by a population who saw politicians as those with power, rather than realising that the power that politicians have is that which voters have temporarily bestowed on them. The person with whom I took issue agreed with many of my points. Where we got stuck was that the current generation had to suffer past generations' greed. I asked "What are people prepared to give up so that hospitals can be better equipped?" I looked at the car park, filled with SUVs, BMWs, Mercedes Benz and more; many very new. My doctor cousin tucked deeper into his jerk pork. Our other buddy had no answer. Bottom line? We are prepared to give up nothing, yet expect things to improve.

There is too much double think. People acknowledge from the highest to the lowest level that the country concerned is in deep trouble. But they only want solutions that involve no sacrifice. The budgets are in deep doo do, but somehow that can be fixed without looking to curb spending or raise revenue. The recommendations don't need to change if the problems are often the same. Governments are often like recidivist criminals, doing the same nonsense repeatedly, and often with similarly lame-sounding excuses. Keep licking the snow cone.