Argentine President Bows to IMF and Banks

On May 30, 2002, the Argentine senate voted to repeal the 1974 economic subversion law criminalising bad business decisions and capital flight in an effort to meet conditions set by the International Monetary Fund (IMF) for issuing new loans to the debt-ridden nation. Senate President Juan Carlos Maqueda broke a 34-34 tie to pass the repeal after weeks of procrastination. Charges pending under the law against several bankers – including one currently in jail – will now be dropped. Those in support of the removal of the law said other existing laws were adequate to protect the bankrupt country against…

Return to Public Control, even if it’s not yet Renationalisation

There is growing evidence that the part-privatisation or sale of public utilities in the 1990s by governments that said they could no longer afford to put down money, neither ensured a cheap or efficient service for customers nor did it free governments of the burden of subsidy. The bluntest admission of the growing disenchantment with private-control of utilities and services has been voiced by New Zealand's Deputy Prime Minister Jim Anderton. Taxpayers in New Zealand, the United States and Britain have bailed out flopped companies or those teetering on the brink of bankruptcy. New Zealand's flag carrier, Britain's partly-privatised air traffic…

California’s Energy Debacle Continues Andrea Cappannari

Despite the fact that California was spared the many days of rolling blackouts that experts predicted would hit the state during the summer of 2001, the region's energy supply has failed to stabilize. As the new year begins, the energy crisis in California has simply taken on a new form: a vast oversupply, the cost of which is being disproportionately borne by working people. According to a report issued in November by the state's Department of Water Resources (DWR), California will have a gross surplus of energy for the next nine years. The reason for this lies with the costly…

Hearings Reveal Enron at Center of California Energy Crisis Andrea Cappannari

In a hearing before the Senate Commerce, Science, and Transportation Committee on April 11, California Public Utilities Commission President Loretta Lynch and California Power Authority Chairman S. David Freeman charged that Enron Corporation's manipulation of the energy market was at the root of California's energy crisis last year. According to authorities, by late 2000 Enron oversaw 30 percent of energy bought and sold in the state's deregulated market, giving it enormous leverage over supply and pricing. California is currently demanding Enron and other energy suppliers refund the state $8.9 billion because of unfair trading practices. Wenonah Hauter, from the watchdog…

The Continuing Railtrack Saga: How the british people have paid for privatisation, as consumers and now as taxpayers

The declaration to privatise the railway system in Britain was one of the more spectacular – and symbolic – statements of Margaret Thatcher's government. It was seen as a confirmation of the belief that many public utilities and infrastructure services, which were earlier thought to be “natural monopolies,” could in fact be privatised, and subjected to competition through market forces. Of course, this was only one of the many privatisations that occurred in the period between 1979 and 1997. State assets were sold for a total of 65 billion pounds, and more than 1 million workers were transferred from public…

With Imperial Arrogance, Imf Demands that Argentina Commit Suicide

On the afternoon of April 11, the IMF's Anoop Singh, head of the Special Operations Division, held a highly unusual, and unperfected press conference in Buenos Aires, to brutally threaten the Duhalde government. Singh acted like an imperial overseer: the press conference was organized by IMF spokesman Francisco Baker, who flew in to Buenos Aires from Washington for 48 hours solely for that purpose. It was held at the Finance Ministry auditorium, but Finance Minister Remes Lenicov and other officials didn't show their faces. It was the IMF's show, in which Singh warned "it will be very difficult, and decidedly…

Wall St. Wants ‘Korean Shock Therapy’ in Japan Kathy Wolfe

Wall Street spokesmen led by the American Enterprise Institute (AEI) have begun a new "sell Japan'' drive, demanding the "Korean model'' of shock therapy in Japan, under which the International Monetary Fund (IMF) deregulated South Korea, shut down chunks of its industry, and sold it off to Western banks. Japan's banks must immediately take $1.2 trillion in bad loans and "let them go into the market,'' U.S. deregulation "expert'' Robert Dugger told Washington audiences on March 16 and 18--let the assets collapse, and be bought up at a nickel on the dollar. If Japan balks, foreigners and Japanese depositors will…

Institutional Development in Developing Countries in a Historical Perspective Ha-Joon Chang

1. Introduction The issue of institutional development, especially under the slogan of "good governance", has recently come to occupy the centre stage of development policy debate. During the last decade or so, the international financial institutions (IFIs) have come to recognise the limitations of their earlier emphasis on "getting the prices right" and have accepted the importance of the institutional structure that underpins the price system. Increasingly, the IFIs and many donor governments are putting emphasis on "getting the institutions right" and attaching "governance-related conditionalities". Critics argue that the institutions of developed countries can be too demanding for developing countries…