The Mudcat Café TM
Thread #107432   Message #2230097
Posted By: Q (Frank Staplin)
06-Jan-08 - 11:03 PM
Thread Name: BS: Pakistan and Kenya
Subject: RE: BS: Pakistan and Kenya
Without knowing the purpose of the assignment of the book by Perkins at these schools, I wouldn't be able to comment.

I am trying to absorb "The Debt Threat..." by Hertz, which seems to be a reasonable assessment of the loan and loan repayment programs, which are not functioning as they were designed to do; the debts destabilizing poorly governed developing countries.
Poorly thought out programs loaded with money are subject to mis-direction unless carefully monitored. Obviously this requires that attempts to mis-direct the loan money into private or corporate pockets must be foreseen and controls imposed. There are many examples of failure, not just at the present time. Hertz suggests some remedies. This is a worthwhile study, and Hertz has followed it up with several articles. She has excellent credentials and teaches at both Cambridge and Utrecht.

On the other hand, Perkins seems to have helped his companies scam money that should have gone into specific projects or into debt repayment, and spun his little tale of thievery into the large problem of loans to small countries and loan repayments.
I cannot credit his material.

Globalization of industry is something that governments have yet to deal with. Large multinationals take on some of the trappings of omnipotence, but it is up to governments to control them. That sounds simplistic, but major governments and combinations thereof (European Union, etc.) are not used to the new world of business and have not developed viable controls. An uninformed public (that includes me) shares the blame. Venal governmental administrators and companies of course will lap up money made by their country's resources if controls are lacking.
Large loans have accrued to small governments that could have been repaid if their governments were honest or had been monitored by the lenders but means of doing so do not exist or were not installed; slowly these debts are being forgiven or repayment delayed, but reluctance to act means the problem will remain for some time to come.

I hope that some of the solutions suggested by Ms Hertz can be implemented; I don't know if they are possible or suitable.
I am not able to prescribe any solution, it is a complex subject.