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As Ghana re-enters the belly of the vampire (The IMF)…

Mon, 4 Aug 2014 Source: Bokor, Michael J. K.

By Dr. Michael J.K. Bokor

Saturday, August 2, 2014

Folks, the latest development in the government’s search for solutions to the country's ailing economy is to enter the corridors of the International Monetary Fund for “reprieve”. And this “reprieve” will definitely be bound to conditionalities. It is a reprieve designed to come at a huge cost for people already languishing in narrow circumstances. The IMF has no “sympathy” or “empathy” running through its veins, and will always go for the jugular when it comes to imposing conditionalities on those knocking on its door for reprieve.

We are all too familiar with how the IMF and its affiliate (the World Bank) function, especially when dealing with countries in dire economic straits. But if care is taken, some kind of “reprieve” may be forthcoming, granted that those implementing those conditionalities and the citizens can endure the belt-tightening.

Being whip-sawed, the government has no option but to dash to the IMF, some may say. But is the IMF our true ally? Or should the government have done otherwise, depending on home-grown economic measures to solve the problems? Where are own economists and financial experts? Mere empty braggarts parading the political landscape? Or real problem-solvers with reliable acumen?

In any case, the first giant step has been taken (in desperation?); and here is the news report, based on which I have given the above opinions:

“President John Mahama has directed that immediate steps are taken to engage the International Monetary Fund and other developmental partners to help the country out of the current economic challenges.

That is one of the major resolutions reached after he met the Presidential Advisory Committee on the Economy Friday. The meeting was to reflect on the range of issues affecting the economy, its impact on businesses and work out strategies to restore confidence in the economy. President John Mahama also directed that urgent measures are taken to stabilize the fallen cedi.

The President also demanded that urgent measures are taken to expedite the coming on stream of domestic gas supplies to provide cheaper fuel for power generation as well as minimise the foreign exchange burden of crude oil imports.

(Source: http://www.myjoyonline.com/business/2014/August-2nd/government-opts-for-imf-bailout.php)

This development gives us more to discuss, folks. There isn't much wrong with reaching out to the IMF for support. After all, many other countries have gone that way, the latest being Ukraine. But going to bed with this Bretton Woods vampire spells danger in many ways. Are Ghanaians really prepared to be told to tighten their belts (pay more taxes, face removal of subsidies on utility services, agricultural input, and many others) all the more? I don't think so, which will be the tipping point in this arrangement with the IMF.

Ghanaians can bear testimony that the harsh conditionalities of the IMF (especially as implemented under Rawlings) didn't help the economy grow. Kufuor sent Ghana HIPC as a result; but the economy couldn't be put on an even keel. The Mills and Mahama-led administrations reeled very much; and we are where we are today as a result of the worsening economic problems.

Will the IMF now be our redeemer? I wonder but will wait to see how things begin being done before stating a definitive position on this move. I want to see which conditionalities the IMF will impose and how much money it will be willing to advance to Ghana and how the government intends to use that support.

In the interim, though, I can say that the government has taken an unexpected desperate step whose consequences it should prepare for. We have been there before and can wring our fingers in abject regret. Will this willy-nilly re-marriage with the IMF bring about better results to give Ghanaians any hope for a brighter future to live for?

As a product of the post-World War Two dynamics, the IMF was set up to function as a “Father Christmas” but to rake in whatever comes its way for the benefit of those who brought it into being—the capitalists masterminding global economic inroads. And capitalists know no limit to their accumulations nor do they have any compunction for morality. The more they have, the more to look around for. And they grab it with vigour, violence, and determination.

Dashing to them for relief is a euphemism for economic and political suicide. They know how to toss the dice for advantage. Is the Mahama-led government sure that by re-entering the belly of this vampire called the IMF, it won’t be forced to impose more hardships on Ghanaians? There is already much tension in the system, and the government should be guided by goings-on so as not to do anything to push a resilient citizenry to the wall. Too much is at stake and nothing should be hastily done to deepen woes. We are monitoring the situation.

I shall return…

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Columnist: Bokor, Michael J. K.