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13.11.2014 CPP

IMF Bailout- Our National Descent To Economic Serfdom—CPP

By CPP Ghana
IMF Bailout- Our National Descent To Economic Serfdom—CPP
13.11.2014 LISTEN

Our country, liberated from colonial rule with great expectations of national prosperity is currently locked in financial and economic dungeons of debts and deficits. This is the result of poor and corrupt fiscal management.

Unable to craft and devoid of an appreciation of development policy initiative from our culture and history, our government has turned to her former colonial masters now morphed as the International Monetary Fund (IMF) for economic development policy direction and financial bailout.

The country that justified her struggle for political freedom in the belief that self-government with danger is preferred to servitude in tranquility is certain to reap servitude with danger in the negotiations with the IMF.


This is the ultimate outcome of the bailout conditions negotiations because it will exclude any independent development policy initiative by our government and insist on compliance with policy dictates of the IMF that will take us back to the colonial pattern of relations where we are only suppliers of raw materials for industries in other countries.

The implicit loss of control of fiscal and monetary policy means a reduction in the capacity of government to support and create opportunities for our local entrepreneurs to produce and manufacture goods to meet our needs.

Predictably, the IMF will for example demand the privatisation of the Tema Oil Refinery, one of the nation's most valuable investments, as a subterfuge to import refined fuel products and also to avert the development of a petrol chemical industry in our country as envisaged in that investment.

The recurring prescription of a tight fiscal and monetary policy will preclude and forestall government intervention to promote investments in our search for economic independence.


The IMF policy prescription of liberalisation of trade and financial markets in the bailout negotiations will also deny Government support for the co-operative sector and farmer based organizations in food and raw material and agricultural production. It will also deprive us of ownership of productive resources on account of our weaker position to compete for the control of these resources and markets. In the labour and social sectors, the conditions will include a freeze of wages, a cut back on social support services and opportunities for employment creation to deepen our poverty.

The government has argued that an IMF endorsement of our national economy in the bailout negotiations is required to leverage international economic relations for development.

Rather, as history suggests, international economic relations are driven by nations' search for global resources and their overt and covert schemes to appropriate and control these resources, and not by the IMF's endorsement of their economies. This explains why Zimbabwe receives foreign investments in her mining sector in spite of an IMF embargo.

The truth is that an IMF intervention in national economies which is invariably caused by economic mismanagement and corruption is a dent in national pride because these interventions entail a loss of national sovereignty in fiscal and monetary policy determinations.


The logic of our struggle for independence is that political power and freedom is the necessary condition for our development and prosperity that should never be surrendered.

Our economy will not be revived by IMF development policy prescription of fiscal austerity, a hasty and premature liberalisation of trade and financial markets, but by an adoption of the Nkrumaist development policy guidelines of decolonisation based on lessons learnt from our history of slavery and colonialism. This has been proven by the tenure and development achievements of the CPP government of the first republic.

The IMF on the other hand has no proven track record of guiding any under-developed economy to economic prosperity. It is on record that writing as a member of a group of independent external experts, the current Chairman of our National Development Planning Commission Professor Kwesi Botchwey observed in a “Report by a Group of Independent Experts Review: External Evaluation of ESAF; Washington DC, IMF 1998” that Structural Adjustment did not lead to sustained growth in countries that complied with its prescriptions and that the austerity measures in these countries stifled growth.

The negotiations with the IMF for an economic and financial bailout are definite predictable steps on a steep slope to poverty and economic serfdom. We should be guided by the Nkrumaist axiom that “whenever there is economic dependency there is no freedom.”


Samia Yaba Nkrumah
CPP Chairman and Leader
www.convention peoplesparty.org

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