THE news has been awash of the visit of the Managing Director of the International Monetary Fund, Christine Lagarde to Nigeria on a working visit to Africa. It’s is no secret that our mono economy is in great danger no thanks to the plummeting price of crude oil in the international market and the decision of the United States to lift its 40- year ban to export crude oil. Lagarde reportedly said: ‘A team of economists from the IMF would be engaging the financial authority in Nigeria to review the economic policies.’ The organisation got us into this gargantuan economic mess with their neoliberal economic policies, so why should they review our economic policies?
Economic historians would never forget what happened in the build up to the Asian financial crisis of 1997. The meltdown was caused by the heavy reliance by South Korea, Thailand, Indonesia, The Philippines and Malaysia on short-term foreign loans – reliance brought about by the advice given them by the International Monetary Fund and the United States Treasury Department. Private enterprises in those nations could no longer meet their payment obligations anymore. There was palpable panic in the international currency market caused by this defaults. Currency traders converted their Asian currencies into dollars leading to the plummeting of the Asian currencies making it harder for them to pay back their loans and escalating greatly the costs of imports.
IMF then stepped in and told the debtor nations that they would provide the loans for them to meet their foreign debt payments on the condition that they adopt structural adjustment policies. Thailand, South Korea and Indonesia accepted the loan while Malaysia rejected the loan and opted for the imposition of capital control instead which closed up the economy and discouraged the activities of speculators. The IMF laughed them to scorn initially for their bold move but they were forced to eat their words after the storm had passed. The Thai economy shrunk by 10.5% in 1998, rebounding to a mere 4.4% in 1999, Indonesia’s contracted by 13.1% in 1998 and rebounded to a pitiable 0.8% in 1999 with poverty rising from 11% before the crisis to between 40 and 60%. Food shortage was so terrible in the largest Muslim nation on earth that the then President B.J. Habibie asked the citizens to fast twice a week. In South Korea, unemployment rose from 3% to 10% with suicide a common occurrence. Contrast this with Malaysia whose economy contracted by 7.4% in 1998 and then rebounded by 6.1% a year later. The nation governed with the visionary leadership of Dr. Mahathir Mohammed has gone on to become an Asian Tiger with its economic miracle recovery studied in a similar mould to that of Singapore.
Malaysia was smart enough to keep its economic policies away from the ruinous Bretton Woods Institution. No country has ever developed with partnership from the IMF. Japan, whose economy rose so much that it became the second most prosperous on earth in barely 19 years, didn’t do so with any IMF economic advice. China, the world’s fastest growing economy didn’t have regular meetings with IMF officials for her to lift 600 million people out of poverty. Even South Korea that once fell prey to the IMF had to extricate themselves from their stranglehold in order to get to the acme of development.
The whole talk about not giving us a loan is all hogwash. We need to keep them far away from us as you dine with the devil with a long soup. The IMF always steps in when a country is experiencing crisis and the visit of their helmswoman is timely. We are the biggest economy in Africa and we are one they can’t ignore in their under development agenda. It’s in our best interest if we create hostility and not to make the environment even conducive for such a visit. What do we stand to gain? Loss of productive man hours on the part of the President and the members of his key economic team in hosting a surreptitious foe. It’s sad that the change Nigerians assiduously fought for is gradually becoming one of the biggest scams in the nation’s history.
The prescription of the IMF weakens the economic and social function of the state by allowing the supremacy of market forces. The 2016 budget is clearly at odds with the agenda of the neo-colonialist institution. The plan to recruit 500,000 teachers is parallel to their agenda of yanking off subsidy from education for instance. The budget shows a sturdy state interventionist leaning which is in contrast to their hands off of the state in the running of the affairs of the nation.
The IMF would clearly not gain from our development; It is high time we gave meaning to our sovereignty by developing a home grown economic programmes that would get us permanently out of the woods rather than always outsourcing our thinking caps to the whipping boys of the West.
