Egypt declines World Bank loan as incompatible with national interest

reply to post by nightbringr


The rates of interest and payment modalities are not the conditions that are questionable. Rather the obligation to privatize and expatriate resources that, often times are the only source of wealth the countries require to repay the loans to begin with.

A study of modern history shows that yes, they do have a gun pointed to their heads.

Countries who attempt to use their natural wealth to benefit their citizens promptly experience "coup d'états", assassinations, and/or war which lead to conditions where private corporations benefit from these resources, and a dictator gains a massive bank account.

This cannot be compared to a private individual entering into a contract with a lending institution. In the case of governments, the loan is taken out with the insurance that someone else will be paying for it. (the tax-paying citizen)

I honestly see this as a ploy to transfer vast amounts of wealth into the hands of a select few... hey, this is ATS after all.

the Billmeister

Turned down the loan? Dead men walking! You don't turn down the NWO and get away with it. I give the current government six months before the CIA and/or other groups ferment another revolution to put in more amenable people to run Egypt who will sign up when told to sign up.

These are very brave people, "not in the national interest", brilliant, I applaud the bravery of these men!

Originally posted by Billmeister
The rates of interest and payment modalities are not the conditions that are questionable. Rather the obligation to privatize and expatriate resources that, often times are the only source of wealth the countries require to repay the loans to begin with.

The businesses, even if sold generate taxable wealth for the countries. The business earnings are taxed, employees are taxed on earnings, and private businesses are far and away more efficiently run than government run monopolies. Competition drives innovation and efficiency. While a country could perhaps profit more owning these companies if run well, they signed on the dotted line and knew the consequences when they did. Often government run companies and utilities are boated and inefficient and in fact do not generate wealth, but in fact cost them dearly. Greece has many examples of this.

While yes, if you are unable to pay your loan, they at times will require sale of national assets, but I challenge you to show me where the IMF or world bank requires expatration of these companies. If domestic interests are able to buy said companies, countries will favor them first and foremost if the terms are acceptable or competitive with foreign offers.

Again, simply pay your loans and this will never be an issue. And again, most importantly, DO NOT TAKE LOANS! Balance your budget and act in a responsible manner and there will be no problems.

Originally posted by Billmeister
A study of modern history shows that yes, they do have a gun pointed to their heads.

Countries who attempt to use their natural wealth to benefit their citizens promptly experience "coup d'états", assassinations, and/or war which lead to conditions where private corporations benefit from these resources, and a dictator gains a massive bank account.

Perhaps this is true to an extent. The world powers are always trying to extend their reach and spheres of influence, and coups and the like can serve their purposes very well. I do not see a direct link between refusing a IMF loan and a government being toppled however. If you can provide some proof of this, id love to read it over.

Originally posted by Billmeister
This cannot be compared to a private individual entering into a contract with a lending institution. In the case of governments, the loan is taken out with the insurance that someone else will be paying for it. (the tax-paying citizen)

Correct. A government is not an island unto themselves. Tax revenues will always be generated by a healthy, productive economy and the citizens contributing to such. Why is this a bad thing? If people want social programs and other things that governments run massive deficits to pay for, then yes, they will be taxed to pay for them. Food and shelter are not free. What i do not agree with is the governments spending huge on military and expanding their spheres at the expense of the ordinary citizen.

Originally posted by Billmeister
I honestly see this as a ploy to transfer vast amounts of wealth into the hands of a select few... hey, this is ATS after all.

I see it as the Eqyptian government running deficits irresponsibly like nine tenths of the the worlds governments since WW2 and needing money to pay for them.

The responsible solution as always it to balance the budget. But of course this is politically unpopular and does not help their military unless other cuts are made.

Originally posted by nightbringr
The businesses, even if sold generate taxable wealth for the countries. The business earnings are taxed, employees are taxed on earnings, and private businesses are far and away more efficiently run than government run monopolies. Competition drives innovation and efficiency.

My problem is when primary natural resources profit private corporations as opposed to the citizens of the country, and these are the resources often concentrated on by the loan conditions. As far as any business which transforms these resources for profit, I have absolutely no problem with.

A good example of this is the privatization of drinking water in Bolivia to Bechtel. Though perhaps innovative, the consequence to the citizens was their inability to afford the water that flowed on their land.

Originally posted by nightbringr
Again, simply pay your loans and this will never be an issue. And again, most importantly, DO NOT TAKE LOANS! Balance your budget and act in a responsible manner and there will be no problems.

This is, obviously the ideal situation, and where I see a conspiracy of sorts.
Here is the list of countires by external debt as you can see, every country is largely indebted.

This means that an external source (outside of the "nation" status that is) is the major collector of all the interest payments. Interest payments which make up a large part of sovereign debt which the tax-payer will never get any benefit from whatsoever.

Originally posted by nightbringr
The world powers are always trying to extend their reach and spheres of influence, and coups and the like can serve their purposes very well. I do not see a direct link between refusing a IMF loan and a government being toppled however. If you can provide some proof of this, id love to read it over.

I meant to point out that the refusal to privatize and export wealth leads to "intervention" not the refusal of the loan. I see the loan conditions as step one in the process of "extending their reach of influence", if accepted, there is no need to proceed to the more direct (and often violent) methods.

Originally posted by nightbringr
If people want social programs and other things that governments run massive deficits to pay for, then yes, they will be taxed to pay for them. Food and shelter are not free. What i do not agree with is the governments spending huge on military and expanding their spheres at the expense of the ordinary citizen.

On this point, I could not agree more. My original point is highlighted once again, if the people in power were making their decisions with the best interest of their citizens in mind, most of these fiscal problems would not exist in the first place.

Thanks for the intelligent participation. We may not agree 100% on every point, but then that would make for a very bland world, and a boring ATS.

Cheers,

the Billmeister

Originally posted by Billmeister
This is, obviously the ideal situation, and where I see a conspiracy of sorts.
Here is the list of countires by external debt as you can see, every country is largely indebted.

This means that an external source (outside of the "nation" status that is) is the major collector of all the interest payments. Interest payments which make up a large part of sovereign debt which the tax-payer will never get any benefit from whatsoever.

Agreed, but i dont see the conspiracy. What i do see is this. Most democratic governments offer at least two terms in office for an elected government. Said government obviously wants its second and if possible (here in Canada there is no limit on terms), third, fouth, fifth and so on terms. In order to achieve this, they do what the people want.

Come next election, promises are made to not increase taxes, to maintain or improve the status quo and they point back at the illusory (and loan produced) economic growth of their last term as proof. Borrowing money to dump into the economy for improvements and increases in the quality of life for the people make the government look good in the eyes of the people. So massive deficits are run up, money dumped into social programs and improvements and the government continues to borrow to pay for this all. The current administration win re-election by a landslide. At least this is the plan.

Anytime a government dares to raise taxes are reduce or cut social programs to help balance the budget or increase debt repayment, people object, lobby groups threaten to remove support for an administration, and said administration caves to pressure. After all, angering an interest group might harm their chances for re-election.

So the cycle continues. This is what i see. This makes much more sense and is in fact quite obvious to anyone who looks at the promises the governments make us time and time again, election after election. This is not sustainable and eventually something has to give. This is now happening in Ireland, Spain and Greece.

Originally posted by Billmeister
I meant to point out that the refusal to privatize and export wealth leads to "intervention" not the refusal of the loan. I see the loan conditions as step one in the process of "extending their reach of influence", if accepted, there is no need to proceed to the more direct (and often violent) methods.

Not sure i really see this. Again, i would love to see your proof on IMF forcing governments to expatriate companies or a direct link with refusing expatiration of companies with military intervention or aggression.

Originally posted by Billmeister

Thanks for the intelligent participation. We may not agree 100% on every point, but then that would make for a very bland world, and a boring ATS.

I agree as well! Excelent debate, and its nice to discuss this with someone who does not jump down my throat for my generally unpopular views on ATS!

Cheers!

This pretty sums up what can we expect in Egypt

reply to post by nightbringr


I definitely agree with you that politicians' interests are exclusively the finances of their party (and themselves) and their (re)election.
I remember watching Brian Mulroney being questioned during the Oliphant Commission (the Schreiber/Airbus affair) where he stated, in no uncertain terms, that his party's welfare always came before that of the nation. He used the GST reduction as an example, the finance minister's argument that it was a terrible move for the country's balance sheet was overruled by his party's analysts.

As to the other point: Watchdog Faults IMF Loan Conditions

The findings seem bound to fuel criticism that the IMF has arrogated unto itself the power to set terms beyond its formal mandate. In particular, evaluators are urging the fund to ease or jettison demands that borrowers transfer public services and enterprises to private owners.

Requiring governments to sell off utilities, health and educational institutions, or national industries is a contentious business. In some borrowing countries, security forces have clashed with citizens concerned about job losses and price hikes for basic goods and services.

Donor countries impose conditions with little relevance to the IMF's remit, evaluators found. Instead, terms are designed to enable donors to track their own, separate aid programmes and to ensure borrowers meet their benchmarks for debt relief or for entry into the European Union.

The extraneous conditions often are detailed and intrusive, some going as far as dictating legislative proposals to borrowing countries' parliaments.

From a purely pragmatic standpoint, the "what's in it for me?" stance of lending countries could be justified, and they certainly jostle to promote corporations of their own countries and ensure that the potentially new "open markets" are profitable for them.

The expatriation is strongly suggested, but no, military action does not stem from it's refusal. By this, I meant using a country's natural resources to profit it's citizens. (Often labeled socialism or communism)

Whatever you may call it, it is a recipe for foreign intervention to ensure that the profits from these resources be available to private investors. Look at the stance towards Iran and Iraq before and after they nationalized their oil, or the reaction to Central American countries when they attempted to nationalize their banana production, Cuba, Venezuala... to name only a few examples of this trend.

All this said, this is ATS, a place where I can put on my conspiracy theory hat, and have at it.
I am, however, able to see the potential non-conspiracy, political, pragmatic, often cynical standpoint as well, but I have many "real-world" opportunities to wear that hat.

Cheers,

the Billmeister

reply to post by Billmeister


I think Thomas Jefferson did that and they tried to assassinate him for it. Maybe I'm confusing him with W. McKinley. Can't find the article I read a few yrs ago about it.
"Give me control over a nations currency, and I care not who makes its laws.”
Baron M.A. Rothschild

reply to post by Billmeister


All good points, and i plan to look deeper into the conditions the IMF puts in place for these countries. Really at the end of the day i dont see a lot of difference from these practices and a typical house mortgage loan. If you continually miss payments, the bank will repossess you house, and you lose all you have put into it, plus interest paid.

The main point im trying to push here is countries need to be responsible in the way they tax and spend. I have for a long time promoted the idea that countries should be required to post balances budgets. The exeption to this should be in times of dire financial trouble or times of disaster. When these happen, deficits can be run to make matters right, but great effort must be made to balance the budget as soon as humanly possible. I would love a Canadian law to be passed requiring somthing of this sort.

Balance budgets, dont spend beyond your means and do not borrow, especially when the terms of the agreement are not to your likeing. I live by these beliefs, and it has allowed me to live a decent life while working a low paying job. Life is good!

reply to post by xuenchen


Egypt owns the Suez canal and an oil pipeline from the Red Sea to the Mediterranean sea.

no one with a globalization mentality would want to see this boat rocked.

i hope the Egyptian people lead the world in change, as the USA did in the 18th century.

a stable North Africa, politically, would be followed by a flood of foreign investments.
it could be years before the USA solves it's financial problems, meanwhile overseas customers is the best we can hope for.

and Egypt could be a major customer for everyone.

Qaddafi is the fly in the soup holding things up, he must go.

but well done for the Egyptians so far, i love you and you are in my daily prayers.