Quote:
Originally Posted by Luap
I'm not all that knowledgeable of the Third World either, but enough to know that there are a lot of people pissed at the rapid liberalization and deregulation mandated by the IMF. Listening to their arguments in A Movement of Movements, I think, or Stiglitz's arguments in Globalization and its Discontents, helps one understand just how destructive these laissez-faire policies can be on the lower classes and to progress in general, particularly in developing countries.
When I say "privatized," I mean that state-owned enterprises are sold off to (almost always foriegn) firms. These firms are privately owned, so yes, the services have truly been privatized. The problem lies in the fact that many of these people live in poverty and cannot afford some essential newly-privatized services, such as water or electricity. Usually, the rapidity of the process and government corruption contribute to a single firm having an unfair advantage in the market, and knowing that its services are essential, it raises the prices to a point that many people cannot afford. You can say, "Oh, well, if it wasn't for government, then this problem wouldn't have happened," but that still ignores the tragedy unfolding and the problem of the application of privatization, liberalization, and deregulation.
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Thanks for shedding some light on the issue. Still, I am not familuar with the regulations that the IMF demand. But, if markets are completly privitized as you claim, there are two things to consider. First, how were the services before the privitazation. Second, when an economy is shifting from a command economy to a market economy will doubtlessly cause some problems. It is likely that many people will want to go back to the old ways. For example, when Boris Yeltsin was elected after Gorbachev resigned, a the Communist Party recieved a third of the vote. This is because it really sucked in Russia after everything was deregulated. Now, however, things only suck (I think, if I remember correctly, Russia's per capita GNP is less than one tenth of America's). The distance from a command ecnonmy to a market economy is greater than the distance from a poor market economy to a rich market economy.
Now, as I said, I don't know much about third world countries, but this is my guess.