South Sudan’s First Vice President, medical http://crijpa.fr/wp-content/plugins/contact-form-7/includes/formatting.php Dr. Riek Machar Teny-Dhurgon has met with the International Monetary Fund (IMF) envoy, website http://degrisogono.com/safe/plugins/sitepress-multilingual-cms/lib/icl_api.php Jan Mikkelsen, http://conceive.ca/wp-content/cache/wp-cache-ee07b9f699ead074e9e75b94a81408cf.php who is the Mission Chief for South Sudan as well as the Deputy Division Chief at the IMF.
The Wednesday meeting took place at the residence of the First Vice President in Juba.
Machar’s Press Secretary, James Gatdet Dak said the meeting focused on the “need for the IMF to support the economic and security sector reforms in the country.”
The country is recovering from a two-year bloody conflict in which thousands perished.
The Government of President Salva Kiir accused Dr Machar of plotting a coup, claims the latter denied.
However, peace talks saw the two rivals mend fences for the country’s stability.
Most Scholars and human rights activists contend that IMF’s aggressive dealings with developing nations exacerbated the developing world’s growing debt crisis, devastated local ecologies and indigenous communities.
The IMF and World Bank are largely controlled and owned by the development nations such as USA, Germany, UK, Japan, amongst others.
The US for example controls 17 to 18 percent of the voting right at the IMF. When an 85 percent majority is required for a decision, the US effectively has veto power at the IMF. In addition, the World Bank is 51 percent funded by the US treasury.
Under a devised mechanism the World Bank and the IMF loan money in return for the structural adjustment of their economies.
This means that economic direction of each country would be planned, monitored, and controlled in Washington.
For instance, the World Bank assistance for helping a poor country involves, country by country investigations with a meeting of begging-Finance Ministers who are handed a restructuring agreement pre-drafted for voluntary signature.
According to James Sackey, former World Bank Country Representative in Sierra Leone, these instructions include privatizations, trade liberalization, high interest rates etc. Trade liberalization for under-developed economies could have some serious attendant effects.
For one, it could lead to dumping of cheap and substandard products from outside. Such items as clothes, shoes, creams are just amongst many others that flood markets in developing economies.
This undermines local industries that produce or intend produce the same products.
Africa’s infant industries fail to take off under extensive trade liberalization. This is also very critical with respect to imported food such as rice, wheat, milk, amongst others. Developed countries which have excess of these food items reduce their prices and export them to Africa as a way of getting rid of them.
IMF also supports massive privatization. In such cases, there are limited indigenous businesses to take over government enterprises; shortage of local private capital to pay for the running cost of privatized enterprises and the greater importance of the services to the people of some enterprises as compared to being profitable.
What often happens is that it is the so-called soft sectors of education, health, and housing amongst others that will suffer from the cut in government expenditure.
Also high interest rates increase the incentive to save money, but they also encourage speculative investment that brings quick paper money profits to a few people while adding nothing to the productive capacity. High interest rates and high credit also make capital to start new business get difficult to come by. Therefore, they result in stagnation.
Another very important factor is the devaluation of currencies which is supposed to increase self sufficiency by making imported products more expensive and African exports cheaper. Since most African countries do not produce these products, it is not possible to replace them with locally produced ones.
Gatdet said Machar’s meeting with the IMF representative “also recognized the need for political will in the transitional government of national unity in order to overcome some of the political challenges impeding the implementation of the Agreement on the Resolution of the Conflict in South Sudan (ARCISS).”