Thursday, August 24, 2017
Add this page to Blinklist Add this page to Del.icoi.us Add this page to Digg Add this page to Facebook Add this page to Furl Add this page to Google Add this page to Ma.Gnolia Add this page to Newsvine Add this page to Reddit Add this page to StumbleUpon Add this page to Technorati Add this page to Yahoo


ideas have consequences

You are here:Home>>Archive>>Dr. Okonjo-Iweala, World Bank and Country
Monday, 05 September 2011 14:08

Dr. Okonjo-Iweala, World Bank and Country

Written by Bisi Olawunmi
Rate this item
(0 votes)
Ngozi Okonjo-Iweala,  Devangwa Mmari and B.K. Vyas Ngozi Okonjo-Iweala, Devangwa Mmari and B.K. Vyas World Bank

OPINION

Dr. Ngozi Okonjo-Iweala, a former World Bank Managing Director and Nigeria's current finance minister has been generating controversy mainly on whether or not the debt relief she worked to effect during her first coming as finance minister under the Obasanjo presidency could be regarded as an achievement.

Some also question the veracity of the loans, in the first instance, and that as such should have been repudiated, while others simply feel the woman is over rated. There are those who even question her loyalty to the Nigerian nation, insinuating that she owe more allegiance to the World Bank. By extension, does this mean that Nigerians who hold dual American citizenship automatically have greater allegiance to America?

One of the latest articles critical of Okonjo-Iweala's second coming was a two-part series by Dr. Ola Balogun in The Sun newspaper of Monday, August 22, 2011 and Tuesday, August 23, 2011 captioned 'Is Ngozi Okonjo-Iweala for Real" whose peg was my article captioned " Ngozi Okonjo-Iweala and her critics" published in The Sun on August 3, 2011.

I am in agreement with one aspect of his article where he pointed out that one of the African "experts" touted by the 'International Community' "include Mr. Alassane Quattara, who has now been installed as Cote D'Ivoire President by his Paris and Washington-based puppet masters". He apparently forgot to add Quattara's cheerleader friend in Aso Rock Villa.

Dr. Ola Balogun is also right in the general background he provided to the effect that the Bretton Woods institutions - The World Bank and The International Monetary Fund (IMF) - are fronts for Western agenda in developing countries and enforcers for the Paris and London Clubs of Western creditors. But he drew wrong conclusions and inappropriately put the blame for whatever he presumed was a rip-off of the country on Dr. Okonjo-Iweala.

A fundamental flaw with many commentators about the World Bank and IMF roles in developing countries, as well as those of industrial nations, is to ascribe any altruism to their actions. On the contrary. they act in their institutional and national interests, which are often at variance with those of developing nations. The poser is: Does Nigeria and its officials act in the nation's interest? In fact, has Nigeria established enduring core national interests and values? That is the fundamental problem which must be tackled. Except for Nigeria, self interest is the reality in international economic relations among nations.

The fact of the matter is that Nigerian officials have exhibited bareness of ideas, policy options and limited implementation capacity in the development process such that the nation becomes prey to well-packaged policies from external sources. Nigeria, which was a net lender to the World Bank in the early to the mid-70s, was to become a heavy borrower/debtor to the same institution and commercial banks within 10 years because it got 'persuaded' into a borrowing spree on the slogan that Nigeria is under-borrowed! So, for Dr. Balogun to put the blame for the idiocy of Nigeria's ill-conceived borrowings which got expended on ill-digested white elephant projects on the World Bank and the IMF, whose prescriptions are basically advisory, subject to the acceptance of the client nation, is therefore illogical. The problem is that Nigeria does not operate a knowledge-based economy or a knowledge-based anything, for that matter. It, therefore, gets easily bamboozled into signing enslaving agreements, contracts and loan deals which have made the country a honey pot for all kinds of economic adventurers.

World Bank Officials

World Bank President, A. W. (Tom) Clausen in an address at the Nigerian Institute of International Affairs in Lagos on April 15, 1982 had warned about the disquieting prospect of "an absolute worsening of circumstances for millions of Africans in the years ahead" but, nevertheless, admitted that "no single development strategy works best anywhere". Yet, Nigeria bought the Structural Adjustment Programme (SAP) menu of the IMF in 1986, the exact one strategy fits all approach that the WB warned against four years earlier, with the Chief Olu Falae-negotiated devaluation of the national currency -on IMF's prescription - practically bringing the economy to its knees.

On the debt payment, it should be seen as mutually beneficial. The creditor nations wanted to recoup whatever they can, lump sum, from a Nigeria reaping huge revenues from high oil prices before oil prices crash, while for Nigeria, paying $12 billion of the cumulatively compounded debt estimated at $30 billion rather than perpetually paying huge sums as debt service charge made financial sense. The point raised by Dr. Balogun that Nigeria had paid $50 billion as interest in debt service, more than twice the $17 billion principal originally owed, even makes a compelling case to negotiate a debt bargain, rather than paying debt service, ad infinitum. As to debt repudiation, that is not on the table because the international economic system is so structured as to impose punitive measures on the country that dared.

For those who believe debt repudiation is an option, the answer can be found in the 1983 Jodidi lecture delivered by Mr. Tom Clausen on February 23, 1983. In the lecture, titled 'Third World Debt and Global Recovery' at the Centre for International Affairs, Harvard University, Boston, Clausen had pointed out that while "the special risks of sovereign lending are not covered by bankruptcy laws", but since nations continue to exist as part of the global economy, they need finance. He stressed that "although many countries are unable to make payments on time, not one has repudiated its debt". The World Bank president then added the clincher: "The developing countries that have the biggest debts outstanding are deeply involved in international trade and technology, so for them the cost of being cut off from the world economy - which is the price of debt repudiation - would be enormous". This was not an idle threat, given the fact that the industrialized West controls the financial levers of the world. It is this enormous coercive power of the 'International community' that places developing countries at a disadvantage even when Clausen at that lecture conceded that there were "examples of imprudent borrowing and lending". But then, the weaker, borrower nations carry the can.

Olawunmi, a former Washington correspondent of News Agency of Nigeria, teaches in Department of Mass Communication, Bowen University, Iwo

 

Last modified on Monday, 05 September 2011 14:23

2 comments

  • Comment Link Judithhig Thursday, 16 February 2017 01:40 posted by Judithhig

    wh0cd406720 ventolin chloroquine citation

    This e-mail address is being protected from spambots. You need JavaScript enabled to view it
  • Comment Link Buying xanax online Tuesday, 08 November 2016 02:11 posted by Buying xanax online

    Hi, everything is going fine here and ofcourse every one is sharing facts, that's truly fine, keep up writing.
    http://xanaxforsleep.com/

    This e-mail address is being protected from spambots. You need JavaScript enabled to view it

Add comment