Chapter 6: Bailing out the Poor

1. How it Works

1.1. Short term loans to countries facing crisis

1.2. Enforces financial Discipline via conditions

1.3. Controlling inflation and how the government spends money

1.4. Providing foreign currency

2. Problems with the IMF

2.1. Countries no paying off loans do to bad policies

2.2. Inconsistant measurements of improvements

2.3. Self perpetuating loan debt spiral

2.3.1. Planner's Disease

2.3.2. Heavily Indebted Poor Countries

2.4. Governments must pay IMF loans back first

2.5. "We will tell you have to do, as well as promise you that you are doing it for your own free will"

2.5.1. Planner Mentality

3. Easterly's Solutions

3.1. Lack of accountability to beneficiaries

3.2. Reduce Intrusion

3.3. Return to orginal mandate of financial stabilization

3.4. Avoid poor countries

4. Chapter Details

4.1. Main focus of the chapter was the structure of the IMF, the interworking of how they give out loans to countries that qualify and criticisms of the program

4.2. Organized into different heading that focus on various questions and critizesm of the organization

4.2.1. Is the IMF a Wimp?

4.2.2. Unstable Behavior

4.2.3. International Monetary Paradise

5. Succusses

5.1. South Korea, Tiland (1980)

5.2. Mexico, 1995

5.3. East Asian financial crisis, 1997-98

6. Failures

6.1. Social Movements believed to be caused by the IMF's actions

6.1.1. Argentia

6.1.1.1. President Menem increased public spending to get reelected in 1999

6.1.1.2. IMF continued to give them money although they weren't paying it back

6.1.1.2.1. $40 billion total, $14 billion from IMF

6.1.1.2.2. Interest rates increased and IMF game $3 billion more

6.1.1.2.3. Ended up paying bond holders 35 cents on the dollar in Feb 2005

6.1.2. Bolivia

6.1.3. Brazil

6.1.4. Columbia

6.1.5. Costa Rica

6.1.6. Eduador

6.1.6.1. January 2000, thousands or protesters gathered over the reduction of teacher salaries while fuel and electric prices increased

6.1.6.2. President Mahuad overthrown and replaced with Vice President Noboa, he had to continue to follow IMF policies. Citizens were not happy with this and voted Noboa out and former Coup leader Colonel Lucio Gutiérrez in.

6.1.7. Hondoras

6.1.8. Kenya

6.1.9. Malawi

6.1.10. Nigeria

6.1.11. Zambia

6.2. Political

6.2.1. "Spending a lot of time in the IMF program is associated with a higher risk of a state collapse"

6.2.2. Afghanistan

6.2.3. Angola

6.2.4. Burundi

6.2.5. Liberia

6.2.5.1. Spent 77% of 1963-85 in IMF program

6.2.5.2. Finally collapsed into anarchy in 1985

6.2.6. Sierra Leone

6.2.7. Somalia

6.2.7.1. Spent 78% of 1980-1989 in IMF program

6.2.7.2. Now in total chaos

6.2.8. Sudan

6.2.9. Zaire

6.2.10. Angola - Only country not to spend and time under IMF program