on IMF conditionality
in 3rd world debt tonight, but can't let this annoying buzzing sound
bother me all day.
World Bank loans, IMF loans and domestic foreign aid are apples, pears and oranges. They are different sources of cash, coming from different organisations at different times. That said, as themusic mentions in his wu, conditionality attached to IMF/WB loans took off in a big way in the 1980's and 90's. Both the World Bank and the IMF are pressured by wealthier countries and multinationals (such as industrial concerns and private lending institutions) to include clauses in their loan agreements that essentially state "before you pay this back, you pay us back first". It's become incredibly convoluted, and leads to more instances of default and non-payment than ever.
ASEAN member states were lucky/smart enough to get in on IMF handouts early on, before conditionality became an integral part of third world lending. Unlike African nations, by and large they made good on the money - but they are still considered developing, not developed countries, lending credence to the underdevelopment thesis. Combine a relative lack of conditionality with domestic political climates of generally decent leadership and law-abiding populations and it becomes somewhat clearer why they didn't perhaps succeed, but were at least able pay their lenders back, where, say, Tanzania or Rwanda did not.
When people discuss debt relief, they are usually talking about individual countries forgiving the foreign aid that has been dispensed to specific developing nations in the past. That is a small ratio of actual debt, and because of the tendency for third world states to have oppressive regimes, civil war/unrest, and few favours to bestow upon rich countries, debt forgiveness would require far more diplomatic wrangling than will ever be witnessed in our lifetimes. Do you think that profit-minded multinational lending institutions would forgive a debt? Do you think, as a lending institution, the IMF can afford to? The Jubilee 2000 movement has a compelling argument...but reality does not need one.