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Ideally, global savings would go to help industrialize poor countries. However, investors are usually scared that they will not get their money back. Either b
by mdnahas 6y ago
Ideally, global savings would go to help industrialize poor countries. However, investors are usually scared that they will not get their money back. Either because of corruption or "nationalization". Thus, investors are likely to choose a less productive use in a country with strong rules to reward investment.
- andrewjl 6y agoThe best way to solve for this is to raise the expected rate of return to cover risks and provide firm legal and regulatory incentives to return investor capital. This is exactly what institutions like the IMF and the World Bank are designed to do.
- minerjoe 6y agoHmm. I thought the IMF and World Bank were there to make sure dictators run off with billions, scott free, and the citizens of the countries that they "ran" are stuck with the bill and the lovely austerity measures?
- andrewjl 6y agoIt generally helps to read multiple perspectives before adopting such an extreme view. Obviously that's not true.
- blululu 6y agoThe parent is a sarcastic exaggeration but it is not totally false. The IMF has changed a lot in the last 20 years, but they had a streak in the 80s where they would force third world countries to scrap their social welfare systems to pay off debt on loans that were foolishly made to previous unelected dictators.
- andrewjl 6y agoI'm not familiar with the details, but if they were at all similar to the mid-2010s Greek situation then they were not sustainable, irrespective of IMFs involvement. Generally I think there are better ways to grow economy than pure austerity, but the details do matter.
- ClumsyPilot 6y agoIs a country responsiblebfor debts incurred by an illegitimate govermnet? Like imagine someone forced you to tale out a loan at gunpoint - that wouldn't fly
- TaylorAlexander 6y agoY’all should give this a watch: https://youtu.be/WYCH1Ylncxc https://youtu.be/WYCH1Ylncxc
- andrewjl 6y agoGenerally banal factual statements selectively arranged to form a narrative aimed at furthering a particular political agenda. TIL Fox News aren't the only ones that do this! Edit: If conspiratorial stuff like this is the entirety of your media diet, you're going to have a hopelessly warped view of reality.
- TheNorthman 6y agoThe video is 21 minutes long and you commented on it's contents 7 minutes after OP posted the link. I think it's also fair to assume some time went by between OP posting and you seeing their comment. How did you find the time to view the clip thoroughly enough to dismiss it so nonchalantly?
- andrewjl 6y agoI'm well familiar with the directors other work to know he has next to zero credibility on economic issues. And after reading the directors quotes on the 2016 election[1], I don't think he has any credibility period. [1] https://en.wikipedia.org/wiki/John_Pilger https://en.wikipedia.org/wiki/John_Pilger
- TheNorthman 6y agoYour rejection of Pilger is baseless and your reduction of his works as dealing with `economic issues' is equally so. Your comments reminds me of Slavoj Zizek's phrase: ideological par excellence in that while you're free to think of Pilger as you want, even biased, you're not absolved of similar issues. Putting the topic on its head, he is still widely respected in academia by amongst others, IIRC, Chomsky
- 082349872349872 6y agoWe (not US) are currently holding our rates negative, which has the potential to be ... problematic. How would the IMF and the World Bank manage to raise rates? Get everyone to agree to a coordinated increase? I had thought Japan showed that rate raising from the financial side can be like pushing on a string.
- andrewjl 6y agoI'm not sure exactly what you're asking, but no country that falls into the category of "needing IMF and the World Bank" is one that has negative rates. It's usually the opposite. In general, negative rates mean there's too much capital in your economy as opposed to too little, coupled with too few investment opportunities. The majority of economies in this situation are facing demographic challenges and the prospect of large population declines, which would (correctly) preclude investors from funding new production capacity.
- 082349872349872 6y agoGot it: I missed the context of "industrialise poor countries." At least we recently voted pro-immigration, or more properly anti-anti-immigration, which should help a little on the demographic front.
- onlyrealcuzzo 6y agoAnd also strong guarantees that if there are any loses, the central bank will devalue the dollar and socialize them.
- pratik661 6y agoExplain? Most Central Banks use inflation targeting (2-4% for rich countries and 4-6% for lower income countries). What you said is unrelated to socializing losses.
- jeffreyrogers 6y agoIt's a chicken and egg problem. Those countries have terrible governments so most money that goes to them isn't used productively. Which in turn causes less money to go to them.
- rexpop 6y ago> Those countries have terrible governments Why?
- fennecfoxen 6y agoAs a root cause: government is hard and good government requires selfless service from highly capable people of virtue who have been inculcated with the appropriate values. Those out for their own self-aggrandizement are common, and better paid. Strongmen are easy to find, and even in democracies can enjoy great success in telling people what they want to hear. Good government is the anomaly.
- rexpop 6y agoWhy are people in the Global South less virtuous?
- fennecfoxen 6y agoIt's not a question of the virtue existing. It's a question of whether it's selected for by a tradition of governance which elevates those people to public office, and whether or not a nascent tradition is liable to be torn down by the local strongmen instead, as a threat. It is a question of institutions, who runs them, and how they perpetuate themselves.
- rexpop 6y agoWhere do pro-virtuous traditions come from, and why are they absent from the Global South?