Monday, January 21, 2008


World Bank economic forecasters predicted a slow-down in the global GDP growth to 3.3%. They said the resilience of developing economies would offset the troubles in the US. I just thought it interesting because they have always predicted resilience in developing economies. It’s not uncommon; in fact, it has been common. Perkins talks about this in “Confessions of an Economic Hitman” where economic forecasters overprognosticate the brightness of the future of these developing states so that they will receive bigger loans from the IMF and World Bank, so big that defaulting on the loan was highly probable. This makes those nation-states beholden to these multi-national money organization (controlled by really one superpower). And they must give certain things like UN votes or land for military bases in exchange for retaining the debt. It’s something that is held over them.

Today things are a bit better since light has been shed on this (thanks to people like Perkins). Many are calling for reform in such organizations. And Mbeki is one of them; actually all of Africa is calling for it.

The World Bank will share with you success stories about their lending. I’ve seen them. I haven’t seen many in Africa. They will quote India, China, Chile, Poland, Vietnam, Botswana, South Korea, Uganda, etc. Some of those may be surprising to you as they are not doing well in an absolute sense (what does that mean?). The problem is that sometimes any country that has been doing relatively well (compared to in the past) can be used as an example and their success attributed to the WB’s work when there are many more factors going on in the country (like with India and China). So it can be questionable. They are definitely doing better than before. But people are still calling for reform, even today. The power needs to be spread a bit more as well.

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