Article Sheds Light on the Fabrication of Charges Against Strauss-Kahn
by Patrick Martin
Global Research, November 30, 2011
World Socialist Web Site
A lengthy article by long-time investigative journalist Edward Jay Epstein, published in the New York Review of Books, sheds new light on the arrest of Dominique Strauss-Kahn, former head of the International Monetary Fund, last May in New York City on bogus rape charges.
The article suggests that the arrest may have been the product of a sting operation mounted with the knowledge of top French government officials, including the chief intelligence adviser to French President Nicolas Sarkozy.
Strauss-Kahn was at the time the frontrunner for the presidential nomination of France’s Socialist Party (PS) and was leading Sarkozy in the polls for next year’s election. His arrest led to his resignation as IMF managing director and the selection of PS chairman François Hollande, a weaker candidate, as the party’s presidential nominee.
The most remarkable aspect of Epstein’s article is how unremarkable his investigation was. There is no sensational breakthrough, no new and unexpected witness, only a careful compilation of facts available in court and public records. On this basis, Epstein points to numerous conflicts between the factual record and the account given by the woman who claimed she was raped by Strauss-Kahn—Nafissatou Diallo, a housekeeper at Sofitel, the luxury hotel where the assault allegedly took place.
Epstein is an experienced investigative reporter, going back to his book-length analysis of the assassination of John F. Kennedy, Inquest, which rebutted the claims of the Warren Commission that Lee Harvey Oswald was a lone assassin. What he does in the New York Review of Books could have been done by the New York Times or any of the television networks, had they desired to seek the truth about the Strauss-Kahn affair.
These media outlets spearheaded weeks of witch-hunting reports on the supposed rape case, which ultimately collapsed after the New York District Attorney’s office found it impossible to conceal the gross contradictions in Diallo’s accounts. Neither the Times nor the networks have yet reported on Epstein’s article, although accounts have appeared online and in the wire services.
Epstein established a detailed timeline of the events of May 14, 2011—based on the evidence of room-access cards used by the staff and guests, cell phone records, and time-stamped videotapes from several surveillance cameras. The sexual encounter between Strauss-Kahn and Diallo could have taken place only during a seven-minute interval between 12:06 p.m., when Diallo entered Strauss-Kahn’s hotel suite, and his 12:13 p.m. phone call to his daughter, Camille.
The article notes that a male hotel employee used his access card to enter the Strauss-Kahn suite one minute before Diallo, making the sexual assault even less plausible. This employee, Syed Haque, worked for room service and was to clear dishes from the suite. The access cards record only entry and not departure from a room, so it is not known whether he was in the suite when Diallo came in, or during the alleged sexual encounter. Haque refused to speak with attorneys for Strauss-Kahn.
Epstein calls attention to the access card records for an adjacent room, 2820, which Diallo entered before she went into Strauss-Kahn’s suite and again after the supposed “rape,” before she reported to hotel security that she had been assaulted. In her statements to prosecutors, Diallo repeatedly lied about visiting room 2820 before and after the event, until the access card records were produced.
Prosecutors described Diallo’s actions in concealing her repeated visits to 2820 as “inexplicable,” noting in their motion for dismissal that if she had made mention of these visits, the room would have been searched as part of the crime scene.
Epstein writes, “Given Diallo’s conflicting accounts, all that we really know about what happened in the nearby room 2820 is that Diallo went there both before and after her encounter with DSK and then omitted the latter visit from her sworn testimony to the grand jury. We still do not know if there was anyone in 2820 when she entered it again following the encounter with DSK or if, prior to the police arriving, anyone influenced her to omit mention of room 2820.”
The clear implication is that the nearby room could have served as a command point for a sting operation against Strauss-Kahn, with Diallo checking in with her handlers before and after the supposed “attack.” Sofitel has refused to divulge who occupied room 2820 that day, citing privacy grounds.
Epstein suggests that those directing Diallo and orchestrating the sting were linked to the Sarkozy administration in France. He notes that when John Sheehan, security director at the hotel, was alerted to the reported “rape,” he called a 646 area code number at Accor, the French corporation that owns Sofitel.
Sheehan’s boss at Accor, René-Georges Querry, is a former top French police official who, Epstein writes, “had worked closely in the police with Ange Mancini, who is now coordinator for intelligence for President Sarkozy. Querry, at the time that Sheehan was making his call to the 646 number, was arriving at a soccer match in Paris where he would be seated in the box of President Sarkozy.”
One could easily conclude from this chain of connections that the news of Strauss-Kahn’s arrest could have passed directly to the French president.
Another possibility offered by Epstein is that Sheehan called a lower-ranking security official at Accor, Xavier Graff, who was later suspended by the company when it was revealed that he had boasted in an e-mail to a friend that he had been involved in “bringing down” Strauss-Kahn.
The most extraordinary evidence brought forward in the Epstein article concerns the actions of Brian Yearwood, the hotel engineer, and an unidentified man, apparently a security agent of some kind, who are seen on the videotape accompanying Nafissatou Diallo to the security office where she reported the attack. About an hour afterwards, the security office placed a 911 call to the police—a delay which Epstein notes as peculiar and unexplained.
Two minutes after the 911 call is placed, bringing the police into the case officially and ensuring the public vilification and humiliation of Strauss-Kahn, Yearwood and the unidentified man appear on a security videotape giving each other high-fives and performing what lawyers for Strauss-Kahn described as a victory dance. What were they celebrating?
There are other aspects to the case that raise questions, according to Epstein. Strauss-Kahn had been notified that day that Sarkozy aides had been reading his private e-mail messages, and he had asked for a technical analysis of his IMF Blackberry. The Blackberry subsequently disappeared—its GPS locator terminated at 12:51 p.m. that day—and it has never been found.
Another mystery is the long delay in obtaining medical treatment for the alleged rape victim. As Epstein writes: “After she said that she had been the victim of a brutal and sustained sexual assault, it is hard to understand how the security staff would have ruled out that she might require immediate medical attention. But as has been seen, until 1:31, several minutes after receiving a message from Sheehan, the security staff did not make the 911 call. She did not arrive at St. Luke’s Hospital until 3:57 p.m., nearly four hours after the alleged attack.”
All the issues raised by Epstein call into question the decision to charge Strauss-Kahn and the subsequent media frenzy over the case. As the World Socialist Web Site pointed out at the time, there were basic issues of democratic rights at stake, including the presumption of innocence.
The prosecution rushed to indict Strauss-Kahn before any of the evidence could be examined and considered objectively, so as to accomplish his political destruction. This was a goal shared by the Obama administration, in conflict with the IMF director over global economic policy, and the Sarkozy administration in France.
The corporate-controlled media was mobilized for that purpose, along with its acolytes in the petty-bourgeois “left” publications, from the Nation to Socialist Worker. Not for the first time, and not for the last, a lurid sex scandal was used to regulate the internal affairs of the imperialist bourgeoisie.
Strauss-Kahn is, of course, a representative of big business, no different from Sarkozy, Obama or any other capitalist politician in that respect. The warning to be made is that if such brutal treatment, and such a fabricated case, can be carried out against such an individual, what will the ruling elite prepare against individuals from the working class, who lack Strauss-Kahn’s access to millions of dollars and high-priced legal backing?
Patrick Martin is a frequent contributor to Global Research. Global Research Articles by Patrick Martin
Labels: CORRUPTION, DOMINIQUE STRAUSS-KAHN, IMF, SARKOZY
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Strauss-Kahn Screws Africa
Friday, May 20, 2011
by Greg Palast for The Guardian
Now that I've dispensed with the obvious and obnoxious teaser headline, let's drop the towel and expose Dominique Strauss-Kahn's history of arrogant abuse. The truth is, the grandee of the IMF has molested Africans for years.
On Wednesday, the New York Times ran five – count'em, FIVE – stories on Strauss-Kahn, Director-General of the International Monetary Fund. According to the Paper of Record, the charges against "DSK," as he's known in France, are in "contradiction" to his "charm" and "accomplishments" at the IMF.
Au contraire, mes chers lecteurs.
Director-General DSK's cruelty, arrogance and impunity toward African and other nations as generalissimo of the IMF is right in line with the story told by the poor, African hotel housekeeper in New York City.
Let's consider how the housekeeper from Guinea ended up here in New York. In 2002, this single mother was granted asylum. What drove her here?
It began with the IMF rape of Guinea.
In 2002, the International Monetary Fund cut off capital inflows to this West African nation. Without the blessing of the International Monetary Fund, Guinea, which has up to half the world's raw material for aluminum, plus oil, uranium, diamonds and gold, could not borrow a dime to develop these resources.
The IMF's cut-off was, in effect, a foreclosure, and the nation choked and starved while sitting on its astonishing mineral wealth. As in the sub-prime mortgage foreclosures we see today, the IMF moved quickly to seize Guinea's property.
But the IMF did not seize this nation's riches for itself. Rather, it forced Guinea to sell off its resources to foreign corporations at prices much like the sale of furniture on the lawn of a foreclosed house.
The French, Americans, Canadians, Swiss (and lately, the Chinese) came in with spoons out and napkins tucked in under their chins, swallowing the nation's bauxite, gold and more. In the meantime, the IMF ordered the end of trade barriers and thereby ruined local small holders.
As a result of the IMF attack, Guineans who could, fled for freedom and food. This week, then, marked the second time this poor African was molested by the IMF.
Now we have the context of how these two, the randy geezer of globalization and the refugee ended up, in quite different positions, in that New York hotel room.
Since taking over the IMF in 2007, erstwhile "Socialist" Strauss-Kahn has tightened the screws in an attempt to maintain the free-market finance mania that ruined this planet in the first place. [That's worth a story in itself – and that's coming. Our team has a stack of inside documents from the IMF that we will be releasing in my new book in the Fall.]
DSK's lawyers say the relationship with the housekeeper was "consensual." But DSK says that about all IMF agreements with nations over whom it holds life and death powers. That's like saying a bank robbery is consensual so long as you don't consider the gun.
Whether it was agreed-upon sex or brutal rape, it could only have been "consensual" in the same way that the people of Guinea consented to IMF-ordered financial rapine.
The Times article quotes an IMF crony of Strauss-Kahn saying DSK gets his way by "persuasion" not "bullying." Tell that to the Greeks.
It was DSK who, last year, personally insisted on brutal terms for the so-called bail-out of Greece. "Strong conditionality" is the IMF term. Strauss-Kahn demanded not just a devastating cut in pensions and a deliberate increase in unemployment to 14%, but also the sell-off of 4,000 of 6,000 state-owned services. The DSK IMF plan allowed the financiers who set the financial fires of Greece to pick up the nation's assets at a fire-sale price.
The Strauss-Kahn demands were not "tough love" for Greece: The love was reserved solely for the vulture bankers who received the IMF funds but were not required to accept one euro in lost profit in return. DSK, despite the advice of many, refused to ask the banks and speculators to reduce their usurious interest charges that were the root of Greece's woes.
Requiring Greece to sell assets, drop trade barriers, and even end the rule that Greek ships use Greek sailors has nothing to do with saving Greece, but everything to do with DSK's commitment to protect every banker's balance sheet from unwanted violations.
I do not consider it a stretch to say that a predator in the bank boardroom suite assumes his impunity applies to the hotel suite.
*****
Forensic economist and journalist Greg Palast, author of the New York Times bestsellers, Armed Madhouse and The Best Democracy Money Can Buy, has investigated the IMF and World Bank for BBC Television Newsnight and the Guardian Newspapers (London) and Democracy Now! (New York).
Labels: DOMINIQUE STRAUSS-KAHN, GREG PALAST, GUINEA, IMF, NEOLIBERALISM, World Bank
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COMMENT - Has it occurred to anyone that the IMF works the same way as the MOB? Countries that don't comply 'get accident prone'. If that doesn't work, their leaders end up 'sleeping with the fishes'. I'm surprised Dominique Strauss-Kahn didn't wake up sleeping next to a severed horse's head (Godfather reference). However the 'honey trap' is getting a little old - Spitzer, Assange, and now Strauss-Kahn.
IMF chief Strauss-Kahn caught in "Honey Trap"
by Mike Whitney
Global Research, May 16, 2011
Information Clearing House
I have no way of knowing whether the 32-year-old maid who claims she was attacked and forced to perform oral sex on IMF chief Dominique Strauss-Kahn, is telling the truth or not. I'll leave that to the braying hounds in the media who have already assumed the role of judge, jury and Lord High Executioner. But I will say, the whole matter smells rather fishy, just like the Eliot Spitzer story smelled fishy. Spitzer, you may recall, was Wall Street's biggest adversary and a likely candidate to head the SEC, a position at which he would have excelled. In fact, there's no doubt in my mind that if Spitzer had been appointed to lead the SEC, most of the top investment bankers on Wall Street would presently be making license plates and rope-soled shoes at the federal penitentiary. So, there was plenty of reason to shadow Spitzer's every move and see what bit of dirt could be dug up on him.
As it turns out, the ex-Governor of New York made it easy for his enemies by engaging a high-priced hooker named Ashley Dupre for sex at the Mayflower Hotel. When the news broke, the media descended on Spitzer like a swarm of locusts poring over every salacious detail with the ebullient fervor of a randy 6th-grader. Meanwhile, the crooks on Wall Street were able to breathe a sigh of relief and get back to doing what they do best; fleecing investors and cheating people out of the life savings.
Strauss-Kahn had enemies in high places, too, which is why this whole matter stinks to high-Heaven. First of all, Strauss-Kahn was the likely candidate of the French Socialist Party who would have faced Sarkozy in the upcoming presidential elections. The IMF chief clearly had a leg-up on Sarkozy who has been battered by a number of personal scandals and plunging approval ratings.
But if Strauss-Kahn was set up, then it was probably by members of the western bank coalition, that shadowy group of self-serving swine whose policies have kept the greater body of humanity in varying state of poverty and desperation for the last two centuries. Strauss-Kahn had recently broke-free from the "party line" and was changing the direction of the IMF. His road to Damascus conversion was championed by progressive economist Joesph Stiglitz in a recent article titled "The IMF's Switch in Time". Here's an excerpt:
"The annual spring meeting of the International Monetary Fund was notable in marking the Fund’s effort to distance itself from its own long-standing tenets on capital controls and labor-market flexibility. It appears that a new IMF has gradually, and cautiously, emerged under the leadership of Dominique Strauss-Kahn.
Slightly more than 13 years earlier, at the IMF’s Hong Kong meeting in 1997, the Fund had attempted to amend its charter in order to gain more leeway to push countries towards capital-market liberalization. The timing could not have been worse: the East Asia crisis was just brewing – a crisis that was largely the result of capital-market liberalization in a region that, given its high savings rate, had no need for it.
That push had been advocated by Western financial markets – and the Western finance ministries that serve them so loyally. Financial deregulation in the United States was a prime cause of the global crisis that erupted in 2008, and financial and capital-market liberalization elsewhere helped spread that “made in the USA” trauma around the world....The crisis showed that free and unfettered markets are neither efficient nor stable." ("The IMF's Switch in Time", Joseph Stiglitz, Project Syndicate)
So, Strauss-Kahn was trying to move the bank in a more positive direction, a direction that didn't require that countries leave their economies open to the ravages of foreign capital that moves in swiftly--pushing up prices and creating bubbles--and departs just as fast, leaving behind the scourge of high unemployment, plunging demand, hobbled industries, and deep recession.
Strauss-Kahn had set out on a "kinder and gentler" path, one that would not force foreign leaders to privatize their state-owned industries or crush their labor unions. Naturally, his actions were not warmly received by the bankers and corporatists who look to the IMF to provide legitimacy to their ongoing plunder of the rest of the world. These are the people who think that the current policies are "just fine" because they produce the results they're looking for, which is bigger profits for themselves and deeper poverty for everyone else.
Here's Stiglitz again, this time imparting the "kiss of death" to his friend Strauss-Kahn:
"Strauss-Kahn is proving himself a sagacious leader of the IMF.... As Strauss-Kahn concluded in his speech to the Brookings Institution shortly before the Fund’s recent meeting: “Ultimately, employment and equity are building blocks of economic stability and prosperity, of political stability and peace. This goes to the heart of the IMF’s mandate. It must be placed at the heart of the policy agenda.”
Right. So, now the IMF is going to be an agent for the redistribution of wealth.... (for) "strengthening collective bargaining, restructuring mortgages, restructuring tax and spending policies to stimulate the economy now through long-term investments, and implementing social policies that ensure opportunity for all"? (according to Stiglitz)
Good luck with that.
Can you imagine how much this kind of talk pisses off the Big Money guys? How long do you think they'd put up with this claptrap before they decided that Strauss-Kahn needed to take a permanent vacation?
Not long, I'd wager.
Check this out from World Campaign and judge for yourself whether Strauss-Kahn had become a "liability" that had to be eliminated so the business of extracting wealth from the poorest people on earth could continue apace:
"For decades, the International Monetary Fund (IMF) has been associated among anti-poverty, hunger and development activists as the poster child of everything wrong with the rich world's fiscal management of the rest of the world, particularly of poor nations, with its seemingly one-dimensional focus on belt-tightening fiscal policies as the price of its loans, and a trickle-down economic philosophy that has helped traditional wealthy elites maintain the status quo while the majority stayed poor and powerless. With a world increasingly in revolution because of such realities, and after the global financial crisis in the wake of regulatory and other policies that had worked after the Great Depression being largely abandoned, IMF managing director Dominique Strauss-Kahn has made nothing less than stunning observations about how the IMF and the world need to change policies.
In an article today in the Washington Post, Howard Schneider writes that after the 2008 crash led toward regulation again of financial companies and government involvement in the economy, for Strauss-Khan "the job is only half done, as he has been leading the fund through a fundamental rethinking of its economic theory. In recent remarks, he has provided a broad summary of the conclusions: State regulation of markets needs to be more extensive; global policies need to create a more even distribution of income; central banks need to do more to prevent lending and asset prices from expanding too fast. 'The pendulum will swing from the market to the state,' Strauss-Kahn said in an address at George Washington University last week. 'Globalization has delivered a lot ... but it also has a dark side, a large and growing chasm between the rich and the poor. Clearly we need a new form of globalization' to prevent the 'invisible hand' of loosely regulated markets from becoming 'an invisible fist.'" (Link---http://wcampaign.org/issue.php?mid=625&v=y)
Repeat: "...a fundamental rethinking of economic theory".... (a greater) "distribution of income"...(more) "regulation of financial companies", "central banks need to do more to prevent lending and asset prices from expanding too fast".
Are you kidding me? Read that passage again and I think you'll agree with me that Strauss-Kahn had signed his own death warrant.
There's not going to be any revolution at the IMF. That's baloney. The institution was created with the clear intention of ripping people off and it's done an impressive job in that regard. There's not going to be any change of policy either. Why would there be? Have the bankers and corporate bilge-rats suddenly grown a conscience and decided to lend a helping hand to long-suffering humanity? Get real.
Strauss-Kahn broke ranks and ventured into no man's land. That's why he was set up and then crushed like a bug.
(Note: Strauss-Kahn has been replaced by the IMF's number 2 guy, John Lipsky, former Vice Chairman of the JPMorgan Investment Bank. How's that for "change you can believe in"?)
Mike Whitney is a frequent contributor to Global Research. Global Research Articles by Mike Whitney
Labels: DOMINIQUE STRAUSS-KAHN, IMF, World Bank
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COMMENT - Goose. Cooked. Game. Over.
IMF calls for dollar alternative
By Ben Rooney, staff reporterFebruary 10, 2011: 4:37 PM ET
NEW YORK (CNNMoney) -- The International Monetary Fund issued a report Thursday on a possible replacement for the dollar as the world's reserve currency. The IMF said Special Drawing Rights, or SDRs, could help stabilize the global financial system.
SDRs represent potential claims on the currencies of IMF members. They were created by the IMF in 1969 and can be converted into whatever currency a borrower requires at exchange rates based on a weighted basket of international currencies. The IMF typically lends countries funds denominated in SDRs
While they are not a tangible currency, some economists argue that SDRs could be used as a less volatile alternative to the U.S. dollar.
Dominique Strauss-Kahn, managing director of the IMF, acknowledged there are some "technical hurdles" involved with SDRs, but he believes they could help correct global imbalances and shore up the global financial system.
"Over time, there may also be a role for the SDR to contribute to a more stable international monetary system," he said.
The goal is to have a reserve asset for central banks that better reflects the global economy since the dollar is vulnerable to swings in the domestic economy and changes in U.S. policy.
In addition to serving as a reserve currency, the IMF also proposed creating SDR-denominated bonds, which could reduce central banks' dependence on U.S. Treasuries. The Fund also suggested that certain assets, such as oil and gold, which are traded in U.S. dollars, could be priced using SDRs.
Oil prices usually go up when the dollar depreciates. Supporters say using SDRs to price oil on the global market could help prevent spikes in energy prices that often occur when the dollar weakens significantly.
The dollar alternatives
Fred Bergsten, director of the Peterson Institute for International Economics, said at a conference in Washington that IMF member nations should agree to create $2 trillion worth of SDRs over the next few years.
SDRs, he said, "will further diversify the system."
Dollar firms after starting 2011 weak
The dollar has been drifting lower so far this year as the global economy improves and investors regain their appetite for more risky assets such as stocks and commodities.
After rising above 81 in early January, the dollar index, which measures the U.S. currency against a basket of other international currencies, eased below 77 earlier this week.
However, the dollar was higher Thursday against the euro, pound and yen as disappointing corporate results weighed on stock prices following several days of gains on Wall Street. The rally in the commodities market also cooled, with the price of oil and metals backing off recent highs.
In addition, renewed concerns about the debt problems facing troubled European economies put pressure on the euro and supported the dollar. The yield on Portugal's benchmark bond rose to a record high Wednesday, and borrowing costs for Ireland, Spain and Greece remain elevated.
"The market is shedding risk, with equities and commodities weakening and the U.S. dollar broadly stronger" said Camilla Sutton, currency strategist at Scotia Capital.
Traders were also digesting comments from Federal Reserve chairman Ben Bernanke, who told Congress Wednesday that despite a strengthening economic recovery, the unemployment rate remains high while inflation is "still quite low."
Those remarks reaffirmed the view that "the Fed would be very slow to tighten policy given its dual mandate of price stability and employment," analysts at Sucden Financial wrote in a research report.
Bernanke also urged lawmakers to come up with a "credible plan" to bring down "unsustainable" federal budget deficits.
"We expect that the outlook for the U.S. fiscal position will weigh heavily on the U.S. dollar in the quarters ahead," said Sutton. In the near-term, however, she said "a strengthening growth profile" could help provide "a temporary period of dollar strength."
Labels: DOMINIQUE STRAUSS-KAHN, GREAT DEPRESSION II, IMF
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Zimbabwe still has friends, Mr Biti
By: EDITORIAL COMMENT
Posted: Saturday, March 13, 2010 11:05 pm
ZIMBABWE's finance minister, Mr Tendai Biti, recently said that Zimbabwe is now alone as the IMF has indicated that it is not prepared to loan Zimbabwe any money at the moment.
“We are not going to get outside help from anyone. Last year we got $30 million from South Africa and $5 million from China, the credit lines are not going to be extended to Zimbabwe again. We are going to be alone,” said minister Biti.
“No outside country is going to come and help us, let it be not an illusion to anyone,” he added.
The U-turn by a party that promised a lot to the Zimbabwean people is an eye-opener. Zimbabwe has been alone for the last ten years under sanctions.
However, Mr Biti's tone amounted to scaremongering; and this is very troubling.
Zimbabweans have shown resiliency in the face of ruinous sanctions. Mr Biti should get on with his job. He has to find solutions. He is the finance minister. He is in government and in Cabinet.
His statement, which is nothing new to the struggling masses of Zimbabwe is tantamount to admitting that he does not know what else to do about the situation in the country as finance minister; or simply cannot be bothered with diplomatic efforts to re-engage the country.
Mr Biti should now reprioritise and stop his intention to declare Zimbabwe as a Highly Indebted Poor Country (HIPC).
How this programme is supposed to work when no-one is prepared to deal with Zimbabwe is anyone's guess.
The challenges that Mr Biti faces as finance minister are endless.
There are a number of toxic financial, political and social topics that Biti has to contend with as the chief financial person in the country.
Mr Biti faces a backlash from sectors of the economy that the MDC-T party made promises to; including civil servants, industrialists and labour unions.
A note on HIPC
Recently, Mr Biti has been seeking HIPC status for Zimbabwe; despite the vast mineral wealth and rich soils the country is endowed with.
The reason why big corporations weathered the storm in Zimbabwe for the last ten years is because of that endowment.
The minister should be reminded that since its founding the International Monetary Fund, which he is fascinated with, has never achieved success in the developing world.
A few examples would suffice.
When Ecuador adopted an IMF programme in January 2000, it was ordered to raise the price of cooking gas by 80 percent, eliminate twenty-six thousand jobs and cut real wages for the remaining workers by 50 percent in four steps and on a timetable specified by the IMF. By July 2000, Ecuador had to transfer ownership of its biggest water system to foreign operators, then grant British Petroleum rights to build and own an oil pipeline over the Andes.
The IMF had 167 'detailed' loan conditions for that country; more than any country (especially of that size) could handle without "selling its soul".
One writer jokingly commented that the plan looked less like an 'Assistance Plan' and more like a blueprint for a financial coup d'état.
Yet Ecuador, once an OPEC member had vast resources prior to the programme.
How did it end up in such a pickle?
In 1983, the IMF forced the Ecuador government to take over the soured private debts Ecuador's elite owed to foreign banks. To do so, Ecuador's government borrowed $1.5 billion from the IMF. For Ecuador to pay back this loan, the IMF dictated price hikes in electricity and other necessities. Those price hikes failed to service the loan. Yet another 'Assistance Plan' was devised: cut 120,000 civil workers.
Ecuador was also foolishly forced to 'liberalize' its tiny financial market, cutting local banks loose from government controls and letting private debt and interest rates explode.
The IMF also made liberalization of the nation's banking sector a condition of another 'assistance plan'. These were taken over by foreign businesses and the country was effectively controlled by big corporations with a client government, high levels of poverty and social unrest and political instability.
In Tanzania, the IMF and World Bank promised to reduce HIV infections and deaths from AIDS.
They had a "brilliant neoliberal solution" which required Tanzania to charge for what were previously free hospital appointments. Since the Bank imposed this requirement, the number of patients treated in Dar es Salaam's three big public hospitals had dropped by 53 percent after the first year.
The Bretton Woods twins also ordered Tanzania to charge fees for school attendance, then expressed surprise that school enrollment dropped from 80 percent to 66 percent after two years of the 'recovery plan'.
In a nutshell, the IMF cut trade barriers, limited government subsidies and sold off state industries. In just fifteen years Tanzania's GDP dropped from $309 to $210 per capita, literacy fell and the rate of abject poverty jumped to 51 percent of the population.
Yet, the World Bank did not understand why it failed to win the hearts and minds of Tanzanians for its free market game plan.
This is not surprising.
More Zambians today are under the poverty line than before HIPC status was declared.
The failures of IMF/World Bank policies are not surprising. The IMF and WB were not meant to deal with the socio-political and economic challenges faced by developing nations.
They were born in 1944 with simple, laudable mandates -- to fund postwar reconstruction and development projects (the World Bank) and lend hard currency to nations with temporary balance-of-payments deficits (the IMF).
In the early 1980s, Third World nations, hemorrhaging after the fivefold increases in oil prices and a surge in dollar interest payments, brought their begging bowls to the IMF and World Bank, as Mr Biti is doing at the moment.
But instead of debt relief, they received Structural Assistance Plans listing an average of 114 'conditionalities' in return for loans.
The plan was always the same: remove trade barriers, sell national assets to foreign investors, slash social spending and make labour 'flexible' (or 'crush your unions').
Since 1985, in fifteen African nations the total number of illiterate people has risen and life expectancy fallen - which Britain attributes to "bad luck, (not) the international economic system."
The IMF and World Bank have called their loans by many names; viz, Structural Adjustment Programmes, Poverty Reduction Strategies, etc. These are all cosmetic terms masking the profit motive. They are simply loans and they attract interest. HIPC is not debt cancellation, but a way to help a country repay its debt and make more money for the IMF.
The IMF and WB are not charities or humanitarian agencies. They seek profit. Africa is the new focus of that profit motive because of its abundant mineral wealth.
When IMF chief Strauss-Kahn comes to Africa Africa, he is not on a 'holy pilgrimage' or on some humanitarian trip. He is a bank manager seeking to get repayment for loans plus the interest accrued. He is there to offer more loans.
It does not make economic sense to ask Zimbabwe to repay US$2 billion to get less than that in new loans. If the IMF is sincere about poverty reduction, it should simply relieve the countries of that debt, or give some long period moratorium.
What options for Africa, developing world?
Radical land reform is needed in Africa to feed its own people and produce that which it has a comparative advantage.
Cottage industries must be protected in order to promote competitiveness and employ the growing pool of the unemployed.
Foreign direct investment should be promoted, but only in so far as it benefits the host fiscus and ultimately uplift the country.
Global rules of engagement should be modified to allow "fair play" and to help suppliers of raw materials and primary commodities to thrive. Powerful players are simply not altruistic in their pledge to 'help Africa'.
This, among a host of other national, not foreign, policies should be pursued.
Mr Biti is simply wrong on declaring Zimbabwe a HIPC country. HIPC is neither a solution nor a remedy.
He is also wrong when he says, "We are going to be alone." Zimbabwe will never be alone given the vast mineral resources in that country. The world will never "leave us alone" and events of the last ten years have proved that.
Zimbabwe will always be engaged with the international community. But it has to do it in a way that is not parasitic as espoused by the IMF and other like-minded organisations and countries; or by the "Best Finance Minister in Africa".
Labels: DOMINIQUE STRAUSS-KAHN, IMF, NEOCOLONIALISM, TENDAI BITI
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Zambia risked incurring huge loans-IMF Managing Director
Thursday, March 11, 2010, 21:15
International Monetary Fund (IMF) Managing Director Dominique Strauss-Kahn said today that Zambia risked incurring huge loans if the country continues borrowing from other countries.
Speaking at State House today during a meeting with President Rupiah Banda, Mr. Strauss-Kahn advised government to get loans that the country would be able to pay back to avoid huge debt burden.
Speaking at the same function , President Banda hailed the International Monetary Fund (IMF) for undertaking ambitious reforms aimed at enhancing the governance of IMF and economic well being of member states.
President Banda said the reforms, aimed at making the fund’s financial support more flexible and better tailored to the diverse needs of low income countries, were particularly important for countries like Zambia.
Mr. Banda said he was aware that Zambia has benefited from the reforms with resources amounting to US$260 million in 2009 and this year under the extended credit facility.
The president said the IMF and Zambia share a common goal of reducing poverty through macro-economic stability adding that government would continue working closely with the Fund.
The president said however that his government remained committed to addressing the problem of infrastructure and improving the business environment despite the financial limitations. He said the country looked for China for support because it needed financing at concessionary rates to build the necessary infrastructure.
Mr. Banda said his government looked forward to continued collaboration so that more progress could be made for the benefit of the Zambian people.
The president said he acknowledged the role IMF played in reducing the country’s debt burden through the highly indebted poor countries initiative (HIPC).
He said although the debt burden had been reduced and a lot achieved in terms of freeing resources for economic development, there were still a lot of challenges in terms of economic development and poverty reduction.
Among the challenges the country was facing were lack of sufficient infrastructure especially in the road, railways and energy sectors.
Mr. Banda said before the reduction of the debt under HIPC, the country was able to access funding under the international development Association (IDA).
“Now that we have achieved debt sustainability, our access to IDA funding had diminished despite our huge developmental needs. This has limited the extent to which we can implement development projects,” President Banda said.
The president said however that his government remained committed to addressing the problem of infrastructure and improving the business environment despite the financial limitations. He said the country looked for China for support because it needed financing at concessionary rates to build the necessary infrastructure.
Mr. Banda said he was delighted that IMF chief decided to include Zambia among the countries he was visiting because it has consolidated the relationship Zambia has with IMF
ZANIS
Labels: DOMINIQUE STRAUSS-KAHN, IMF, RUPIAH BANDA
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IMF tips Africa to tackle longer-term challenges
By Simon Willson
Tue 09 Mar. 2010, 21:30 CAT
WITH recovery getting under way, Africa should now address longer-term challenges to the continent’s future, including governance issues and climate change, to be able to press ahead with the region’s economic transformation, IMF managing director Dominique Strauss-Kahn has said.
Strauss-Kahn who visits Zambia today assessed the impact of the global economic and financial crisis on Africa.
While noting that the turbulence had struck Africa through many different channels, he said that; “all across the continent, we can see signs of life, with rebounds in trade, export earnings, bank credit, and commercial activity.”
The IMF now expects growth of around four and half per cent in 2010.
“In short, I think that Africa is back - although a lot depends on a global recovery that is in its early stages,” he said.
The IMF chief is on a trip to Kenya, South Africa, and Zambia to meet political, business, and civil society leaders and assess the impact of the global economic and financial crisis on Africa.
“The twin challenges for Africa are to revive strong growth and reinforce resilience to shocks,” he stated in the speech on March 8 that set the scene for a panel discussion involving Kenya’s Prime Minister Raila Odinga, Finance Minister Uhuru Kenyatta, environmental activist and Nobel Prize winner Wangari Maathai, rock star and political activist Bob Geldof, and Transparency International’s Akere Muna.
“The first place to start is with macroeconomic policies,” the former French finance minister said.
Strauss-Kahn said that because many African countries had undertaken good policies before the global economic crisis, this had helped to inoculate them against a more severe downturn - strengthening budget positions, reducing debt burdens, holding down inflation, and building comfortable reserve cushions.
At the same time, he emphasised that there was no room for complacency regarding Africa’s economic outlook.
“This is not the time to rest on our laurels,” he said. “Africa remains highly vulnerable to economic dislocation from many different sources. Think about swings in commodity prices, natural disasters, or instability in neighbouring countries. Think about the risks that come from relying heavily on remittances, aid, and financial flows.”
He noted that because debt positions had improved dramatically, many countries had been able to use the budget to counteract the crisis, including preserving social spending.
“A major lesson from the crisis is that countries that sowed in times of plenty were able reap in times of loss. Policy buffers must therefore be rebuilt, to allow for future countercyclical responses, with fiscal policy and with reserves. Social safety nets must be strengthened - this is the first line of defence against adverse shocks. We should also beware that widening income inequality - across regions or segments of the population - can aggravate tensions and make shocks more destabilising.”
Labels: DOMINIQUE STRAUSS-KAHN, IMF
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IMF head in 'double-dip' global economy warning
By BBC
Tue 19 Jan. 2010, 14:30 CAT
IMF Chief Dominique Strauss-Kahn said the global recovery remained "fragile"
The International Monetary Fund head has warned that the global economy could experience another downturn - a so-called double dip recession. Dominique Strauss-Kahn said countries should not exit from stimulus packages that have bolstered growth through huge amounts of government spending.
"We have to very cautious because this recovery remains very fragile," Strauss-Kahn said. Separately, Germany and France raised their growth forecasts for the year. Strauss-Kahn added that China and Asian economies are leading the recovery.
"Recovery in advanced economies has been sluggish," he said. "The best indicator is private demand and employment."
"In most countries, growth is still supported by government policies. For as long as you do not have private demand strong enough to offset the need of public policy, you shouldn't exit."
He added that tackling high levels of government debt will be a priority for many governments.
He suggested that the IMF would raise its growth forecasts for this year.
The IMF is currently predicting the global economy will grow by 3.1 per cent in 2010.
Growth upgrades
Europe's two largest economies, Germany and France, also raised their economic growth forecasts for the year.
Germany now expects its economy to expand by 1.5 per cent in 2010, from its previous prediction of 1.2 per cent.
"We are pleased that the economic development is now somewhat better" than it originally predicted, the finance ministry said.
The French government almost doubled its growth forecast to 1.4 per cent, from 0.75 per cent.
"Our forecasts at the start of 2010 have also improved, as the international climate and demand addressed to France have picked up," finance minister Christine Lagarde said.
The IMF also raised its French forecast for the current year, to between 1 per cent and 2 per cent, rather than 0.9 per cent.
Labels: DOMINIQUE STRAUSS-KAHN, GREAT DEPRESSION II, IMF
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‘Proposed monitoring of Zesco is a threat to ERB’
Written by Chiwoyu Sinyangwe
Saturday, July 25, 2009 7:28:51 PM
FINANCE minister Dr Situmbeko Musokotwane’s proposed monitoring criteria for Zesco’s performance threatens the relevance of Energy Regulation Board.
According to the Letter of Intent to International Monetary Fund managing director Dominique Strauss-Kahn, Dr Musokotwane stated that the government wanted to improve the performance of Zesco because it was aware of the current shortage of power and the risk it posed to sustained growth.
“Although the completion of the power station rehabilitation project will restore generating capacity and reduce load shedding temporarily, new capacity is needed to meet increased demand over the medium term.
Policies will be strengthened to ensure that sufficient electricity generation capacity is installed as quickly as possible,” Dr Musokotwane stated “To this end, the government has adopted a new electricity strategy with measures to adjust electricity tariffs to reflect the cost of service; (ii) attract private investments and competition in the sector; increase the operational efficiency of Zesco and strengthen its governance; and ensure that Zesco has sufficient resources to implement the planned rehabilitation and new generation projects.”
Dr Musokotwane stated that specifically, a revised electricity tariff schedule that would raise the average tariff significantly for 2009 would be adopted and a public announcement would be made of the indicative tariff levels for 2010-11 consistent with the policy to reach cost-reflective levels by 2011, with end of last month being put as structural benchmark.
He stated that the announced indicative tariff levels would reflect the cost of the planned large-scale investment in new generation and other electricity structure, and take into account the tariff setting for the mining sector.
Dr Musokotwane told IMF that in order to encourage more private sector participation in electricity generation, the government would submit the necessary legislation to Parliament for the Zambian Grid Code, which would set out rules and procedures for the operation and pricing of the transmission network by end of this year.
“Further, the management of Zesco will, by June 2009, enter into a performance contract with the Government designed to improve the efficiency and corporate governance of Zesco. The contract will stipulate a number of efficiency enhancing and cost cutting measures with the purpose of reducing Zesco’s operational expenditures, including on wages and salaries,” he stated. “It will also require Zesco to submit semi-annual reports on its overall operations to the committee of ministers tasked with implementing the electricity strategy, in order to monitor progress in implementing the agreed cost cutting measures.”
Dr Musokotwane’s approach has unsettled some senior electricity experts within ERB who have called on the government to clearly state the relationship between the ministerial committee and the energy regulator.
“I don’t think ERB is aware of that because it sounds like usurping the powers of ERB. What that basically means is that by taking over the regulatory regime of ERB amounts to passing a vote of thanks,” the source within ERB who asked not to be named said without giving much information on the matter. “But the best approach you can take is that since the announcement came from honourable Musokotwane, protocol does not allow that we comment, so maybe get in touch with honourable Konga, our minister.”
ERB uses the Key Performance Indicators (KPIs) to monitor the performance of Zesco.
The principle behind KPIs, which are intended to address areas of concern such as quality of service and institutional efficiency among others were for Zesco to implement self-enforcing incentives embedded in the electricity tariff structure.
During the last assessment by ERB, Zesco scored 42 per cent in the first quarter, 41 per cent in the second quarter and 51 per cent in the third quarter of 2008 in implementing KPIs.
KPIs were agreed upon between Zesco and ERB in 2007 and the indicators aspect of the evaluation of any consideration for tariff adjustment by the power utility.
And when reached for a comment, Konga said there was need to ensure that Zesco adhered to good corporate governance principles and that the exercise was being done by ERB.
Konga said being a public institution Zesco was supposed to be benchmarked so that the output was as per expectation.
The idea is that ERB is supposed to set the benchmarks regarding the financial, technical and customer performance so that Zesco lives up to the expectations of stakeholders and financiers
Konga who seemed surprised said: “Regrettably, I have not yet seen that letter you are talking about but by and large, there is need to ensure we bring to live and perform to customer expectation and the investor.”
Konga requested Business Post to send him a copy so that he could respond competently and by press time, the minister had not.
Recently, the government announced that it is this year going to borrow on nonconcessional terms US$ 400 million for international financial institutions to enable Zesco deal with the current bottlenecks in the energy sector.
Currently, the government through Zesco is seeking financing to carry out two hydropower investment projects namely the Kariba North Bank Extension and the Itezhi-Tezhi Power Station.
It is understood that Zesco required US $800 million for new projects and rehabilitation of existing infrastructure.
Labels: CORRUPTION, DOMINIQUE STRAUSS-KAHN, ERB, SITUMBEKO MUSOKOTWANE, ZESCO
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Geldof urges IMF to use gold profits to aid Africa
Written by Alister Bull
Saturday, April 25, 2009 2:44:03 PM
WASHINGTON (Reuters) - Bob Geldof on Thursday urged the IMF to use bumper gold sale profits to help Africa survive the global financial crisis, and criticised the rich world for lavishing aid on its banks while the poor world starved.
"We're all begging for aid. We just call it fiscal stimulus these days," the anti-poverty activist and rock music celebrity told a press conference after meeting International Monetary Fund Managing Director Dominique Strauss-Kahn.
"You cannot simply ignore an entire continent...The figures we're talking about for one billion people are a fraction of the money we're dumping into our own system," he said.
Geldof described his meeting with Strauss-Kahn as good, and said that he understood there would be structural problems in having to rework already approved gold sales, which are linked to other agreements to boost the resources of the IMF.
Advocates do not want the IMF to sell more of its gold, just make better use of profits from the sale of 403 tonnes of gold from its stockpile of 3,217 tonnes that have been agreed.
"What is being asked for is not very much," African Development Bank President Donald Kaberuka told the press conference, held under the banner of the ONE campaign group.
The IMF last year approved the gold sales and invest the profits in an endowment to put its finances on a more stable footing.
The Group of 20 advanced and emerging economies agreed at a summit on April 2 in London to use some of the gold sale money to support an additional $6 billion of concessional and flexible finance to the world's poorest countries.
Anti-poverty advocates says this only employs $1 billion of what they say is a $5.2 billion unexpected profit from the gold sales, and Africa should get it all.
"The IMF can't be greedy with its gold. The Fund's member countries can't hold on to the profits created by the recent gold price hike" said Oxfam advocacy director Bernice Romero.
IMF gold sales have been approved by the IMF's executive board of directors, but still needs the agreement of some countries lawmakers, including the U.S. Congress.
"There is an opportunity here because of the increase in (gold) value...to help countries in sub-Saharan Africa, Congressman Gregory Meeks, Democrat from New York, told the press conference. Failure to act will put at risk "all the progress made in the last 10 to 15 years," he said.
Labels: BOB GELDOF, DOMINIQUE STRAUSS-KAHN, IMF
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