IMF admits austerity fails
THE EDITOR, Sir:
In a just-published paper (Neo-liberalism - Oversold?), the International Monetary (IMF) has admitted that its austerity policies have indeed been counterproductive, impeding growth both directly and also through increasing inequality. This, in turn, severely limits the possibility of reducing debt levels.
In any case, according to the paper, high debt levels are not necessarily in and of themselves an immediate problem.The real agenda of neo-liberalism becomes ever more evident - an ideology to benefit the few at the expense of the vast majority (the wealthiest one per cent in the world now have as much wealth as the rest of the planet's population combined). As the servant of neo-liberalism, the IMF is dragging ever more countries into debt slavery and keeping them there.
Will the JLP administration in Jamaica take note and either next year when the current IMF agreement runs out, or preferably sooner, reduce the primary surplus to zero and allow growth to take care of reducing our debt ratio, at the same time reducing hardship and promoting prosperity?
The IMF paper argues that "... there are aspects of the neo- liberal agenda that have not delivered as expected... [including] fiscal consolidation, sometimes called 'austerity' ... . An assessment ... reaches three disquieting conclusions:
• The benefits in terms of increased growth seem fairly difficult to establish when looking at a broad group of countries.
• The costs, in terms of increased inequality, are prominent. Such costs epitomise the trade-off between the growth and equity effects of some aspects of the neo-liberal agenda.
• Increased inequality in turn hurts the level and sustainability of growth. Even if growth is the sole or main purpose of the neo-liberal agenda, advocates of that agenda still need to pay attention to the distributional effects."