Budget time and the IMF

Since some time we are being bombarded by the pre-budget recommendations of the International Monetary Fund (IMF) in the press. According to the IMF , the Mauritian government need to cut/contain expenditures. Some of the measures that could be adopted are the introduction of fees at univesity level and for health care at hospital, the removal of subsidies on rice, to abandon the free transport system for youngsters and teh elderly n so on.

Well we dont kwow if Minister Sithanen will be taking all these into consideration for his budget or will go for a mixed-mode approach. But 1 thing is sure, many Mauritian families are already struggling. I even knew kids who came to school with nothing to eat coz they couldnt even afford to buy bread for the whole family. This is just the tip of the iceberg. We are actually living in a sick society. People are more and more frustrated these days and with the difficult economic situation, we should be concerned.

The IMF, is according to most journalists, the reference in terms of economic decisions. No one really questions its purpose and we have the impression that whatever is suggested by the IMF is ‘the’ way to pull Mauritius out of this abyss; that their recommendations solely will pave the way for our economic recovery.

But the IMF has often been criticised for its failures but rarely or maybe never we see that in our papers ! No one ever question these recommendations and how they may be different/ not work for a country like ours!!

As I learned in Contemporary Issues module, the IMF recommendations along with the World BAnk policies, have been criticized for not being able to wrench African countries from their despairing economic situation. They have on the contrary led to more impoverishment in those countries with their market- oriented measures.

Well just wanted to share this with you all… BTW there is a nice article by Dr Sheila Bunwaree in Matinal on the budget. According to her, if the govt blindly follows the IMF recommendations its the vulnerable that will suffer most.

“…Il y a tout un discours autour de la reprise économique mais le petit peuple ne comprend pas ce que c’est que la croissance économique et la création des richesses au niveau macro. Ce qui l’intéresse c’est comment faire vivre sa famille

Le Mauricien moyen ne fait pas de grandes analyses. Il mesure sa qualité de vie par rapport aux choses immédiates, par rapport à son panier (basket of groceries)…”

Some interesting links:

The IMF: the Wrong Business Model – or the Wrong Business?

IMF: The road that should be taken

Failure of the Fund: Rethinking the IMF Response by Joseph Stiglitz

 

BTW wat do you think about the IMF recommendations? Esp. the introduction of fees for health care at hospital?

IShtiba

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3 thoughts on “Budget time and the IMF

  1. HI Ishtibah…

    The IMF thinks that it can control the world with its fund but we very well know that the conditions it imposes on the poor countries are making the latter poorer… parski ban pays la pa p kave rembourse l’argent preter la!

    As far as the introduction of the health care fees, it has bad and good reasons… First, it will make people realise that the govt is indeed suffering from paying for big interventions in the hospital… Just imagine a facial reconstruction after an accident, am sure if u go to a clinic, it may cost u around a Rs100000 but to a hospital, u pay NOTHING!

    But then, with the introduction of the fees, we would expect a better service! Right? and Better personnel? Damned if we can change the mentality/behaviour of people just in a matter of month! si asterla personnel soyant fichant, dans 1 mois ki zot pou vini? en+ nou bizin penser ki sa ‘fee’ will not contribute to a higher salary among the hospital staff…

    Now, let us think of the vulnerable groups… will a poor guy be able to pay for his medical care or operation at a hospital? or will the govt have a certain framework for these vulnerable groups?

    The Media and some reputable lecturers have bashed our ears that we should stop from the mindset of being ‘des assistes’… So, we should be able to stand up and pay for what the govt provides us… be it from ANY means!

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  2. The IMF, WTO and World Bank all play to the tune of the rich countries. Thanks to their policies, the rich have become richer, and the poor poorer.

    Introducing fees for hospital care would be disastrous to Mauritius. The majority of the population relies on such basic healthcare as they cannot afford private doctors, and removing this welfare benefit would equal to putting the overall health of the population at risk. With virtually no resources, Mauritius has only its human resources to rely upon. It, therefore, makes sense that the state should put free healthcare at the top of their priority list together with free education.

    Paid healthcare will only widen the gap between the rich and the poor, with potentially disastrous consequences.

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  3. First of all we should not forget that the IMF is operating and making recommendations in a context where.. it is biased being influenced by developed countries.

    It gives aid with strings to third world countries blackmailing us, from its creditor`s position,to change our economic policies, influence our interest rates.. while on the other hand it just ignores completely the developed countries who are fattening their farmers` bank accounts with subsidies. Why doesnt it make recommendations on how the US should be administering its economy!???
    Precisely,because first, its so called recommendations have very low if not no weight at all and because it is those same developed countries which are major contributors to its fund.

    Now coming to its evaluation of our system again we should not forget that in the early 70`s, when the Mauritian Govt was considering to introduce free schooling and education services, the IMF published a special report concluding that such an expense in our budget at that time would have created a gap which would have lead our economy to a critical position.

    More than 30 years later, having persisted in our belief that everyone should have the chance to benefit from free education and which is even nowadays entrenched as a constitutional right (whether fairly uniform or not.. we all know there are problems with our education system but the fact is that it is free, has allowed, allows and will allow thousands of children, who are nowadays our parents, who wouldn’t have had the chance to go to school if it had been left to the private sector, to be literate.) i wonder how our country would have been had we followed the Learned opinion of the researchers from the IMF.

    I do not mind measures to get us to be more competitive, i dont not mind reducing l`”assistanat” and proning long term and sustainable means to enable such essential sectors such as tertiary education and health to expand in terms of quality and of capacity. But I am definitely not for a policy where on one hand the govt reduces corporate tax and favors the haves and on the other pretexting budget deficits and increasing national debt reduces assistance to the have-nots in an transitional economic context where inflation is in good way of exceeding last year`s figures and devaluation of the ruppee is uncontrollable.

    You want more competitiveness!?? More quality!?? Re allocate resources! Make the rich pay for the poor.

    I perfectly agree with Mr young when he says that paid education and health would be simply be terrible for the population resulting in deepening the existing social scars which inhibit our development.

    Found that article which may be of interest..its on the debt restructuring of the third world countries.. ooops beg your pardon.. developing countries!

    http://www.cafod.org.uk/var/storage/original/application/phphQhUd5.pdf

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