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You have to admire El Salvador for at least trying something different to get out of its financial hole. Too many countries struggling with issues similar to it

by spaceman_2020 4y ago

You have to admire El Salvador for at least trying something different to get out of its financial hole. Too many countries struggling with issues similar to it (crime, poverty, debt) end up using the same playbook (IMF/Worldbank loans) and dig themselves deeper and deeper into the poverty trap. There are no easy paths for countries like El Salvador. This might be bad too, but at least its a different attempt.

recuter 4y ago
[flagged]
boeingUH60 4y ago
A silly different attempt is still a silly one…the Bitcoins the country bought are now worth over 60% less than their purchase price [1]. A poor country has successfully thrown away tens of millions of dollars…such incompetence on display. 1- https://www.cnbc.com/amp/2022/10/13/el-salvadors-bitcoin-holdings-down-60percent-to-60-million-one-year-later.html https://www.cnbc.com/amp/2022/10/13/el-salvadors-bitcoin-hol...
- earnesti 4y ago
  Whether they have thrown the money away depends how they deal with the bitcoins long term. As far as I know they are still adding to the position. There is grassroots adoption also happening in the nearby countries, maybe the story hasn't ended just yet.
  - osullip 4y ago
    'Maybe' is too unpredictable for most sophisticated systems. Certainty, or at least a level of high confidence, is when businesses invest and consumers spend.
  - xur17 4y ago
    And it's not just about the value of the Bitcoin they purchased. They also have presumably increased tourism and interest in their country at least some (their name is in the news more, and I know for a fact that Bitcoin fanatics have visited specifically because of this).
  - Nursie 4y ago
    It really doesn’t depend on the long term position. They could buy the same amount of Bitcoin now for 60% less. They have lost that money.
yaacov 4y ago
IMF/World Bank stuff actually works, see https://en.m.wikipedia.org/wiki/Economic_liberalisation_in_India https://en.m.wikipedia.org/wiki/Economic_liberalisation_in_I... as an example. “Trying things” is good, but more countries should try IMF reforms like India’s. > From 1992 to 2005, foreign investment increased 316.9%, and India's gross domestic product (GDP) grew from $266 billion in 1991 to $2.3 trillion in 2018[6][7] According to one study, wages rose on the whole, as well as wages as the labor-to-capital relative share.[5] > As an effect of the liberalisation in 1991, extreme poverty reduced from 36 percent in 1993-94 to 24.1 percent in 1999-2000.[8]
- csomar 4y ago
  You nitpicked an outlier. Most countries that undergone the IMF process have not been successful to put it lightly. Also, the passage does not prove that the growth was a consequence of implementing IMF policies. It might have happened in spite of that.
- icu 4y ago
  The question is, at what cost, and with what legitimacy? Too often despots and their cronies get countries into economic trouble, countries that have been taken advantaged by Western interests for hundreds of years. When the country collapses, the IMF and World Bank subjugate the country to Western interests further often to the destruction of the environment and detriment to upward mobility of the population. Using statistics like reduction of extreme poverty or wage growth when not taking into account other factors like inflation or mortality for example does not help when discussing the complex topic of the IMF and the World Bank and if these institutions are a net benefit to the impoverished.
  - yaacov 4y ago
    > Too often despots and their cronies get countries into economic trouble, countries that have been taken advantaged by Western interests for hundreds of years. Agreed. > When the country collapses, the IMF and World Bank subjugate the country to Western interests further often to the destruction of the environment and detriment to upward mobility of the population. Can you give me any concrete examples of IMF reforms making a country worse off economically? > Using statistics like reduction of extreme poverty or wage growth when not taking into account other factors like inflation or mortality for example Okay, mortality in India has fallen steadily from 1% in 1991 to 0.7% in 2020. And inflation doesn’t have a clear pattern but it’s never returned to its 1991 peak of 13.5%. I’m not just cherry-picking stats here! India has actually gotten way way better in the last few decades, and the rate of improvement rose dramatically after the 1991 reforms!
deleted 4y ago
[deleted]
bradwood 4y ago
100%. The IMF/World Bank are basically fucking loan sharks. Those fuckers purport to be helping when they are really doing a lot more harm than good.

recuter 4y ago

[flagged]

boeingUH60 4y ago

A silly different attempt is still a silly one…the Bitcoins the country bought are now worth over 60% less than their purchase price [1]. A poor country has successfully thrown away tens of millions of dollars…such incompetence on display. 1- https://www.cnbc.com/amp/2022/10/13/el-salvadors-bitcoin-holdings-down-60percent-to-60-million-one-year-later.html https://www.cnbc.com/amp/2022/10/13/el-salvadors-bitcoin-hol...

earnesti 4y ago
Whether they have thrown the money away depends how they deal with the bitcoins long term. As far as I know they are still adding to the position. There is grassroots adoption also happening in the nearby countries, maybe the story hasn't ended just yet.
- osullip 4y ago
  'Maybe' is too unpredictable for most sophisticated systems. Certainty, or at least a level of high confidence, is when businesses invest and consumers spend.
- xur17 4y ago
  And it's not just about the value of the Bitcoin they purchased. They also have presumably increased tourism and interest in their country at least some (their name is in the news more, and I know for a fact that Bitcoin fanatics have visited specifically because of this).
- Nursie 4y ago
  It really doesn’t depend on the long term position. They could buy the same amount of Bitcoin now for 60% less. They have lost that money.

yaacov 4y ago

IMF/World Bank stuff actually works, see https://en.m.wikipedia.org/wiki/Economic_liberalisation_in_India https://en.m.wikipedia.org/wiki/Economic_liberalisation_in_I... as an example. “Trying things” is good, but more countries should try IMF reforms like India’s. > From 1992 to 2005, foreign investment increased 316.9%, and India's gross domestic product (GDP) grew from $266 billion in 1991 to $2.3 trillion in 2018[6][7] According to one study, wages rose on the whole, as well as wages as the labor-to-capital relative share.[5] > As an effect of the liberalisation in 1991, extreme poverty reduced from 36 percent in 1993-94 to 24.1 percent in 1999-2000.[8]

csomar 4y ago
You nitpicked an outlier. Most countries that undergone the IMF process have not been successful to put it lightly. Also, the passage does not prove that the growth was a consequence of implementing IMF policies. It might have happened in spite of that.
icu 4y ago
The question is, at what cost, and with what legitimacy? Too often despots and their cronies get countries into economic trouble, countries that have been taken advantaged by Western interests for hundreds of years. When the country collapses, the IMF and World Bank subjugate the country to Western interests further often to the destruction of the environment and detriment to upward mobility of the population. Using statistics like reduction of extreme poverty or wage growth when not taking into account other factors like inflation or mortality for example does not help when discussing the complex topic of the IMF and the World Bank and if these institutions are a net benefit to the impoverished.
- yaacov 4y ago
  > Too often despots and their cronies get countries into economic trouble, countries that have been taken advantaged by Western interests for hundreds of years. Agreed. > When the country collapses, the IMF and World Bank subjugate the country to Western interests further often to the destruction of the environment and detriment to upward mobility of the population. Can you give me any concrete examples of IMF reforms making a country worse off economically? > Using statistics like reduction of extreme poverty or wage growth when not taking into account other factors like inflation or mortality for example Okay, mortality in India has fallen steadily from 1% in 1991 to 0.7% in 2020. And inflation doesn’t have a clear pattern but it’s never returned to its 1991 peak of 13.5%. I’m not just cherry-picking stats here! India has actually gotten way way better in the last few decades, and the rate of improvement rose dramatically after the 1991 reforms!

deleted 4y ago

[deleted]

bradwood 4y ago

100%. The IMF/World Bank are basically fucking loan sharks. Those fuckers purport to be helping when they are really doing a lot more harm than good.