Sun | Jul 22, 2018

No need to bash lending agencies

Published:Saturday | September 6, 2014 | 12:00 AM


It has become a regular habit to hear people, some in very influential positions, bash the World Bank and the International Monetary Fund (IMF) as evil neo-colonial organisations. I heard where the opposition leader of Antigua cursed the IMF as being the source of his island's problems, and I heard another intellectual calling the IMF the "International Misery Fund".

These agencies don't deserve these descriptions. It is not true to say that these agencies are forcing anything on us. Indeed, there are cases of our governments refusing to abide by the recommendations that they sometimes make.

When Jamaica experienced its financial meltdown during the 1990s, some of these lending agencies wanted the government to allow the laws of the market to run their natural course and allow those financial institutions that were practically bankrupt to collapse. The government refused.

When the government found it difficult to honour its bond payments, some of these lending agencies wanted the government to cancel due payments to their creditors. They recommended that the government cancelled interest payments and pay only 75 per cent of the principal due. Again, the government refused.

Whenever we hear of "IMF inspired" policies, we must understand that they are not entirely so. All of the agreements that we enter with the IMF, World Bank and other lenders are just that - agreements. It is our governments that work out these policies with these agencies.

The fact that we borrow their money is proof that the terms of these loans were arrived at with our full agreement.

Michael A. Dingwall