IMF and power privatization

Dolores1

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May 3, 2000
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Check out Joseph Stiglitz (Nobel Prize in Economy in 2001 and former chief economist at the World bank) and his opinion on the IMF. See in the link below the article on IMF practices regarding the power companies. In Today's Hoy, there is a letter from a Roberto Canaan pointing out that the CDE assets were valued at US$3.7 billion, but the DR government accepted to sell them for US$700 million following an audit by none less than Arthur Andersen, the same auditing company involved in the Enron debacle in the US.

http://www.globalpolicy.org/socecon/bwi-wto/wbank/stigindx.htm
 

Criss Colon

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Jan 2, 2002
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"Por Dios"! You have scared the "SHIT" out of me!!!

I have been reading at the site you noted,and other links! Iguess I will start moving my meagre assets back to the US,and get Visas for my kids! I read what happened in Brazil,Argentina,Equador,and Indonisia aafter they followed the "IMF,s" economic demands!!! I see that the DR has already taken the first few steps down the same road to distruction!!!! I may have to double my dose of "Prozac" to be able to sleep now!!!!!:bored: :bored: :bored: Cris Colon
 
Apr 26, 2002
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Dolores,

Thank you for these valuable links. I've been building a personal dossier against the IMF and World Bank for a while (actually, ever since I saw what was coming down the pike for my Quisqueya), but have been looking for a true dissident source of information.
 

mondongo

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Jan 1, 2002
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CC...lets hope others take the time and effort to read these links.....i cant tell for sure...given what i have read over the last 2 years.....the DR has been following the lead of the IFM et al.."those" people have counseled the DR to increase their debt load....because the DR debt load was lower than "similar" countries in the region...the new taxes being imposed are at the behest of the IMF....that ensures that the IMF gets paid its money back...but lets take a quick look at the insidious relationship between the IMF and the "leaders" they support....

the IMF is only lending the DR US$300million a year for 2 years...this, along with the austerity measures will give the phantasm of stability....this stability does something ten times more hurtful...something that is not as easily undetstood as a "US$300million" loan.....


This puported stability along with the new taxes pave the way for HUGE amounts of money to be subsequently loaned....take for example the DR$30Billion auctioned off in Central Bank certificates in JUST 3 months....that is US$1billion in just 3 months in brand new loans...that comes out to about an annualized 100% increase in governement spending....that is AMAZING.....just SCANDALOUS...I am not making this up...

Thus...the IMF is paving the way for the DR to get even deeper into debt...

As a last example, look at Argentina....after the IMF came in in the mid 90's the Argentine external debt grew by 50%!!!.....Argentina's politicians were enabled to borrow over US$40billion...money they could not pay back because they did not invest it....they stole it!!!

Man.....I shoulda been a banker!!!!!
 
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Tony C

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Jan 1, 2002
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I still fail to see the Evil in the IMF. All I see is the evil in the people who elect the the jerks who mismanage the money.

Stop blaming everybody else. The problems with the Dominican economy is the fault of the Dominican People. Ditto Argentina.

Can somebody from the left please explain to me how the power companies in the DR are privatized? Seems to me that when the Gov has to approve rate changes and then doesn't alow you to collect fees from people who use the power it can hardly be considered a private business venture.

Capitalism! Try it. It works!

Tony C.
I hate Hippies!
 

samiam

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Mar 5, 2003
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IMF

Does any one know what the conditions for the loan are going to be?
I've heard the IMF & World bank are asking for some policy changes regarding the economy and government management (ie.: reduce the public payroll, increase tax rates) but I've just heard things from other people and nothing official.
If someone out there ha any info, please let me know because I' m very interested?
 
Apr 26, 2002
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Tony C said:
I still fail to see the Evil in the IMF. ...

... Can somebody from the left please explain to me how the power companies in the DR are privatized? Seems to me that when the Gov has to approve rate changes and then doesn't alow you to collect fees from people who use the power it can hardly be considered a private business venture.

Capitalism! Try it. It works!

Tony C.
I hate Hippies!

Ah, perfect Tony. Your belief in "capitalism" is so pure that you don't believe that authorized MONOPOLIES should be subject to rate review.

We've already had the IMF debate ad nauseum, and you always just post that trite "capitalism it works" line. Just like a Reaganite, why dissect and evaluate a problem when dogmatic catch-phrases relieve us of the need to think.

Common sense! Try it, It works!

Porfi
I hate Hippos! And, as Reaganites go, you're okay!
 

Texas Bill

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Feb 11, 2003
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;) :confused: :bandit:

Tony, Even in the Great USA the power companies are "controlled" somewhat by the individual States they operate in. Such control is usually thru a state agency that has approval/disapproval over rate changes (both up and down). The Federal Government polices these companies under the "Interstate Commerce" clause in the Constitution. The ICC retains authority over the companies, irregardless of the "deregulation" that took place a number of years ago.

Every few months one or another of the companies will go to the appropriate state agency and request a rate increase, based on "Enron" type accounting. Many times they are refused, but eventually wear down the agency involved and succeed. One of the "scams used is the "automatic rate increase" clause they have managed to insert regarding "fuel costs". This has cost many people a helluva lot of money.

Nowhere is there a built in reduction if these costs go down.

Additionally, there is no provision for reduction of rates where profit loss takes place due to inefficiency.

I'm sure you know all this, so why am I reminding you? I don't know either, maybe I just like to see my words on paper(?).

Texas Bill
 

Tony C

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Just because they do it in the US doesn't mean I approve of it.

I know that the State approved power monopolies have to get approval for rate hikes here. So what? I am against state approved monopolies.

I noticed that the knee-jerkers totally ignored the fact that the Dominican Goverment does not allow the so-called, privatize power companies into the barrios and start collecting from all of the thieves stealing electricity!

I am a man of logic and responsibility. That makes me a capitalist. Porfio, you are a man of emotion and excuses that makes you a liberal.
 

Dolores1

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May 3, 2000
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News sources have not reported that the Dominican government does not allow the power distributors to collect for power from the poor.

The main argument in favor of privatization was that the private companies would be able to do what the government had not done -- collect from those that don't pay -- namely the barrios and the government itself.

The main problem here is that the power distributors have not wanted to invest in systems that would enable them to collect without confrontation with the barrios. Several systems and solutions have been offered to them to solve the problem.

For these companies it has just been easier to negotiate and get the government to pay one lump sum. The way things have resulted, it is the paying middle class that pays for the barrios and the government, just like under the old CDE. No progress has been made. The government even funds the electricity fraud patrol!
 
Apr 26, 2002
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Tony C said:
I know that the State approved power monopolies have to get approval for rate hikes here. So what? I am against state approved monopolies...

Porfio, you are a man of emotion and excuses that makes you a liberal.

Uh, Tony, would you prefer five different electric companies running five sets of redundant poles and wires through the neighborhoods so they can "compete" with each other? And who do you think grants the authority to run wires through the public right of way anyway? This is why electricity distribution is considered a "natural" utility monopoly by, well, ALL economists and governments.

Dolores, please, don't try and impress Tony with the facts, like that it was the power distributors themselves who promised to be able to collect in the barrios, or that the IMF is constituted of governments and is therefore not a purely private and capitalistic entity.

You can also bet that he has not read any of the cited articles (though that won't stop him from posting, without explanation, that they have been "thoroughly discredited" or "full of flaws").

You see, Tony does not deny being a Reaganite. Reaganites were very popular in the US in the 1980s and, though rarer than the spotted owl now, they can still be found in some neighborhoods of Miami.

For Reaganites, life is amazingly simple. They take any issue that has a "left" and a "right", or even just a perceived left and right, and always fall on the "right". No further analysis is required and all dissenteres are "hippies". Trite catch phrases like "capitalism, it works" are the answers to all questions (even if, as is the case with the quasi-governmental IMF or authorized utility monopolies, capitalism has little to do with it). Accordingly, debates with Reaganites are usually fruitless.

Importantly, right wing intellectuals like George Will, William F. Buckley and the late Barry Goldwater cannot be called "Reaganites" because they (1) always provide a logical analysis for their positions, and (2) after analysis, sometimes take a position that is not with the "right" (e.g. Barry Goldwater was a free speech absolutist, and Bill Buckley favors decriminalization of narcotics). This would be impossible for Reaganites.

In the US, Reaganites are now almost extinct, having been replaced by "neo conservatives". A distinction between them, though, is that neo conservatives are better educated and capable of reasoned debate.

So enjoy Tony's comments. He is the last of the breed. And, Tony, if applying logic rather than trite phrases to a debate makes me a "liberal" or "hippie", then please pass me the Jimmi Hendrix albums and pot.
 
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Chirimoya

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I know this is slightly off topic but I would say Tony was more of a libertarian: market forces are everything, sink or swim capitalism is what he is advocating.

Chiri
 

Texas Bill

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Feb 11, 2003
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Hey, Folks!
Catch up with the rest of the world!
PURE Capitalism no longer exists!!!
Even in the USA, a severly modified form of Capitalism is practiced and it's called "Keynseism"(yea, I know, I misspelled the man's name).
Government goes in debt for "Social Programs","Military, Defense", and a large number of other expenditures, to boost the economy and "create jobs". Actually causing taxes to necessarily be raised, National Debt to be raised, and putting a damper on economic expansion by taxing the "haves" out of their expendible capital.
That's a mild form of "Socialism" at it's roots and began with FDR in the early 30's. It has been forced on US businesses in varying degrees of frequency for the past 70 years and it appears it will get worse over the next 70.
We have always been told that Capitalism was the best. I'm not so sure, now. Look at the US in the years between the Civil War and WWI. "Robber Barons", plants shutting down to retool when the product glutted the market, starvation wages, factory stores, etc., etc.
Those sorts of things were thr result of "pure Capitalism". Frankly, I think the type of "Social Awareness Capitalism" as is practiced today is a better system. It's called "benevolent Capitalism" and if handled correctly, will be a better system than any in the past.

Texas Bill
 
Apr 26, 2002
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The IMF's stated purpose is to support world macroeconomic stability. It does not purport to have profit as its purpose, so the whole "is capitalism good" argument is irrelevant.

Whether the Dominican government and people are to blame is also irrelevant (albeit true, at least for the 48% that voted for Hippo). The topic is really whether the IMF achieves its stated purpose, or whether its claims of being beneficial to the developing world are a fraudulant smoke screen.

The evidence points to the fact that the IMF does not really help developing countries (whether it be due to those countries own irresponsibility or otherwise). As shown in the articles, the IMF tends to lead these countries down a spiral of more loans, more debt, more economic pressure and more defaults.

So, the IMF can best be described as existing to bail out the banks from the G7 countries that irresponsibly lent money to non-creditworthy governments in the first place (and at exhorbitant terms, I might add). It's the farthest thing from pure capitalism, because the existance of the IMF allows for huge loans that would never otherwise exist based on creditworthiness.

Because of the interlocking directorates between the IMF/World Bank and the lending banks/financeers, this would appear to be an elaborate fraud. Now, some may argue that, in a pure capitalist or libertarian system, the IMF has the right to be an elaborate fraud, and nobody can criticize them as long as government sponsored greed is their motive. Well, okay, maybe one person alive would argue this.

To restate, the tragedy of this elaborate fraud is that it is the poor and what's left of the middle class (the latter who did most certainly NOT vote for Hippo) that will be required to pay back the loans as a result of the IMF ordered "austerity" to come (sorry for the violin strings, Tony). You see, the IMF is the "enforcer" for Citibank, CreditSuisse, JPMorgan, etc. The IMF's target for enforcement are the poor and middle class. The Dominican political class, who stole the money in the first place, will come out unscathed.

All in all, it's an unhealthy conspiracy of exploitation of the poor and destruction of the middle class. And no developing country has a chance to get ahead without a middle class. So the IMF's impact is opposite to its stated purpose! Aren't we seeing this happen in the DR right now?

I'm the pure capitalist and libertarian here, not Tony! I believe that a strong Latin America led by a healthy middle class would create fabulous markets for American and European goods and services and enhance world trade. But the fraudulant exploitation perpetrated by the IMF/World Bank ensures that this will never happen.

I'm the pure capitalist and libertarian here, not Tony! I believe that the DR government should be allowed to default on its loans to Citibank, BancoSantander, CreditSuisse, etc., without threats or gunboats coming from the US. Sorry, Tony, that's the way it would work were the unadulterated free market to apply. But it doesn't work that way now because of the giant, government-created, free-market anamoly known as the IMF.

I believe that the executives and stockholders of these institutions should suffer losses so that they will stop loaning money irresponsibly to corrupt governments. I believe that corrupt, non-creditworthy governments should not be able to buy their own reelections with IMF money.

Governments that are financially irresponsible should not have access to capital. They would be forced to live within their means and develop a local tax base were it not for the IMF and World Bank. Govenments that cause defaults would lose access to foreign capital, creating an automatic internal (rather than IMF-ordered) austerity that would cost them reelection (rather than being able to buy reelection with IMF money). The political class that creates these disasters in the first place would be the ones to pay. What's more capitalistic than that?

As a final indictment of the IMF, the IMF is, as Mondongo has pointed out, lending the DR government an amount of money that is equal to the funds that it will require be reduced from the DR government payroll. In other words, it's smoke and mirrors. The loan has no real value! The DR government could simply reduce its payroll on its own and be in the same financial position without the loan - real loanshark kind of stuff.

If someone can defend the IMF/World Bank with more than trite little phrases, I would truly welcome the info. I'm only calling them as I see them. I really don't want to believe that they are as evil as they seem.
 
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duhtree

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Wow!! Yeah!! Bravo!! Well spoken, my man. But, please don't be shy. Express yourself. excellent.
 

Chris

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Thanks Dolores for these links.

I do believe we can debate the issue of the good or the bad of the IMF for a long time and get nowhere. Show me the country where IMF and/or world bank intervention has brought positive results over the broad economic base? I have not found this country yet.
 
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Tony C

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The truly funny thing is that I am against the IMF also but not for the same reason as you lefties. The IMF, like any international/UN bueracracy, is bloated, wasteful and has a anti-American agenda. It takes my Tax $ which is enough for me to wish it goes away. The IMF can hardly becalled a "free Market" institution. It was created by the UN and has acted under the political whim of that body. It is currently headed up by a German. What do they know about free markets?
read this for some insight.
.http://www.cato.org/dailys/04-18-00.html
You guys like to bring up terms like "Gun Boat". When was the last time the US sent "Gun Boats" to collect on a foriegn debt? What the 1920's? BTW what you call "Gun Boat diplomacy" I call "bill collecting"!

As for being a Reaganite. I do admire the man and his accomplishments. He was the best president the US had up till that time since Roseveldt( Teddy not the socialist one) But I hardly consider myself a Reaganite. I differed with him on many issues. Abortion, Religion, drugs, free speech even foriegn policy at times. So I guess that makes me a conservative intellectual.
 
Apr 26, 2002
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Knee Jerk

Tony, you spurred this debate when you wrote:

Tony C said:
I still fail to see the Evil in the IMF?

Now you say:

Tony C said:
The truly funny thing is that I am against the IMF also but not for the same reason as you lefties.

"The truly funny thing" is that we are in agreement. The "knee jerk" came from you, my friend, because you assumed that I was a "hippie" and initially decided to take the opposite position for that reason and that reason only. Though you deny being a Reaganite, that was a very Reaganite thing to do.

As I previously posted, the IMF/World Bank is an anamoly on free market economics. I agree that it is part of a bloated international quasi-governmental bureacracy that saps tax dollars that could be used for legitimate purposes.

Not bad for a hippie, huh. Now, where did I put my old Janice Joplin albums.
 

Keith R

"Believe it!"
Jan 1, 2002
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Um, actually, Tony, the IMF was created at the Bretton Woods Conference in 1944, a full year before the UN was created. So the UN did not create the IMF. Furthermore, even though the IMF is listed by the UN as an "autonomous specialized agency" in the UN system, it in no way "answers to the political whims" of the UN. [Officials of the UN & IMF both would find the claim that the IMF acts on UN instructions hysterically funny. If the IMF responds to anybody's whims, it is that of the US Treasury, its largest shareholder.] Believe me, a frequent gripe within the UN Secretariat is that the IMF ignores the UN and tries its best to act as if it is in no way related to the UN System. The most the IMF does is submit an annual report on its activities to the UN Economic & Social Council (ECOSOC), as do all the "specialized agencies," but it really ignores the wishes of ECOSOC & the General Assembly.
Regards,
Keith
 
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