By Garvin Karunaratne Ph.D.(Michigan State University)

Greece, once a mighty country, is now in the dog house, with its economy in  tatters, its rulers begging the Troica- the IMF, the EU and the ECB for funds to subsist.  The writer about a decade and a half ago visited Greece, clocking some 5000 miles, wandering all over Greece and its isles, wondering at   the marvels of Greece. It was then a great country, hale and hearty. Then Greece had not joined the EU. Today however, Greece like other European countries has capitulated to the EU.

. The Troica as usual insists on  its pound of flesh, like Shylock and has demanded austerity and the Prime Minister called for a referendum asking the people to decide. The people have decided with a resounding No to Austerity. The Troica has come up with a new austerity package and it is very likely that this will be implemented though the people are on the rampage against it. This was accepted by The Hellenic Parliament. The EU gave a bail out   and Greece paid  Euro 1.6 billion to its creditors and is not in arrears as at now. Another Euro 3.5 billion due shortly is also assured.  Money coming in as bail out goes back to the creditors with profits. Greece limps on for a further few months.. This is an unending scene in many countries and leaves the country further in debt. The leaders are happy because they have money to spend. The IMF and other creditors are happy as they have got back the money that was given out  with profits. The people of Greece are the poorer to suffer with lower incomes.

The Foreign Debt.

It is forgotten that the foreign debt of Greece dates back to the days of the Ottoman Empire.  The following extract is revealing:

When the Greeks had taken up arms  against their Turkish tyrants they did so not only because they wanted to liberate their country but also because they wanted to smash the chains of feudalism, They wanted to see the large estates of the Turkish landlords distributed among the Greek peasantry…. British capitalists were moving into devastated and hungry Greece. . They made their first bid through the loan of GBP 800,000 made to the fighting and bleeding Greeks in  1823.  Only GBP 308,000 ever reached Greece. The GBP 500,000 were extracted beforehand by British bankers as interest and expenses. Two years later when  the struggle in Greece was desperate the second British loan followed. Its nominal value was GBP 2 million. But Greece actually received only  GBP 816,000 and out of this sum again only  GBP 232,000  ever reached the country. GBP 584,000 was squandered in buying vessels which never arrived. The British money lenders had in fact swallowed nine tenths of this loan. These first two loans  constituted the bond which ultimately chained Greece  completely to British capitalism.”(Theodore Doganis: The Greek Civil War- Greece’s Independence day, in https://www.marxists.org/subject/greek-civil-war/1950/03/25.htm)

It is a moot question whether the Greeks of today should be held responsible. As much as Greece drew the funds it is also the responsibility of the creditors to have ensured that the funds were utilized in a constructive manner. The manner in which the funds were embezelled by the brokers and intermediaries fairly absolves the Greeks of today.

In addition, it is accepted that recently after joining the EU, Greece lived beyond its means and went on the spending spree . The moot question is as to why the EU and ECB allowed such funds without funneling it to growth.

Whether the EU, the IMF and the ECB understands what Growth means is also an important question. They with all their professorial experts seem to know nothing other imposing  austerity measures. They miserably  fail to differentiate between Growth and Austerity.

In April 2010 George Papandreau, the Prime Minister requested an international bail out. An  Euro 110 billion bail out loan was approved  on condition of agreeing to austerity measures including structural reforms and privatization of Government assets. This was followed by a second bail out package of  Euro 130 billion.

It was always a question of the Troica insisting on austerity measures being followed.

The following were some of the austerity measures insisted upon from time to time:

The First Austerity Package : February 2010

This was in connection with a loan of E 80 billion. This included a freeze in the salaries of all Government employees, a 10% cut in bonuses, cuts in overtime  workers, public employees.

The Second Austeriity Package : March 2010. This was approved by the Hellenic Parliament in March 2010. The austerity measures included  30% cut in  Christmas, Easter and leave of absence bonuses, a further 12% cut in bonuses,  a 7% cut in the salaries of  public and private employees, a rise in VAT from 4.5% to 5.0 % ,  9% to 10%, and from 19% to 21%., a rise of tax on petrol from 9% to 10%

The Third Austerity Package May 2010 included a 8% cut in public sector allowances, in addition to cuts in the two previous austerity packages.  Public sector limit of E 1,000 introduced to bi annual bonuses, abolished entirely  for those earning over E 3,000 a month. Extraordinary taxes on company profits,, an additional 10% tax on all imported cars,, 10% rise in luxury taxes, the retirement age to be increased from  61 to 65. The number of Public Owned companies was to be reduced  from 6,000 to 2,000.

The Fourth Austerity Package of 2011 The austerity measures included, raising E 50 billion from privatizations, increasing taxes  from those with an annual income of  over E 8,000. and  an extra tax for those earning over E 12,000

The Fifth Austerity Package of October 2011 to January 2312. This was for a E 130 bn. Loan. This included  a debt write off of E 107 billion

Sixth Austerity Package of March 2012 was approved by the Hellenic Parliament in October 2012.. This enforced the austerity agreed in the Fifth Austerity package. This included a provision that the Greek Parliament should pass the  E 13.5 bn. Austerity package for 2013 and 2014. There were disagreements.

Seventh Austerity Package  of July 2013. This was to secure a payment of  E 2.5 bn. Credit. It was laid down that there should be a lay off of 15,000 public employees

(https:// en.wikipedia.org)

What is important to note is that the measures imposed as austerity merely bring about some savings to the Treasury. In other words the austerity measures  can never bring about a permanent solution to the problem of debt.  The savings generated will provide a small measure of liquidity to the Government which will be spent within a short period of time.

To find a solution to the problem of debt one has to get to grips with how the Government is run and make alternations in policy which will enable  productivity, employment and increases in incomes. Such strategic policies are not permitted by the IMF.

The Developed Countries including Greece  have all followed the  FreeMarket  Neo Liberal Economics Model which means that  economic growth is an area which is not to be touched by the Government., Instead the Engine of Growth” is the Private Sector..

It is perhaps an irony of fate that the Troica has so far failed to provide a policy framework that will bring about production and in that process enable increases in  incomes for countries in the EU like Greece. The IMF has also failed in this regard for the Third World countries.  In the FreeMarket Neo Libereal Model.that task,is left to the Private Sector that has as its motto the creation of wealth. National development goals and service to the people goes out of the window. It is a process where the rich become richer and their luxury consumption enable the riches in the country to be spent on imports and services from creditor rich countries. The money flows back with profits to the rich creditor countries.

Even the IMF has never had a strategy to bring about Production. This was highlighted by the authoritative  Wall Street Journal:

The IMF Drill is as follows: A Third World poor country with a pegged currency  is working towards taming its inflation. Instead of a growth formulae it gets the IMF’s old austerity dosage, which slows down the economy. The banks began to falter in paying their old debts. The IMF recommends yet more medicine-devaluation  making the Bank predicament and capital flight worse. The currency slumps and the Banks are now in real trouble…. Is this any way to run an international monetary system.”(Feb 22,2001)

Though this refers to the Third World countries it now applies to Greece as well.

President Kirchner of Argentina, subsequent to the economic upheaval of 2002, in her speech to the United Nations General Assembly on 21/9/2004 said that An urgent tough and structural re design  of the IMF is needed to prevent crisis and help solutions. The IMF must change that direction which it took  from being a lender for development to a creditor demanding priviledges.”

The immediate reply from the Group of Seven Industrial Superpowers was to warn Argentina that she had to come to an immediate  debt restructuring agreement with creditors … and impose structural reforms to prove to the world financial community  that it deserved loans and investment(Wikipedia). There was no option, Argentina had to comply.

This is exactly what is happening to Greece today. With the No Vote at the Referendum, the leaders of the EU have stated that Tsipras and his Government are leading the Greek people on a path of bitter abandonment and hopelessness”(Metro London)

As proved already in this paper all the austerity measures do not bring about production, increases in income for the people, which can off set import expenses and bring about a positive change in the economy.

Though the IMF and the Troica, as  in the case of Greece,  have no proper strategy to bring about development, the annals of development effort reveal instances where Governments have tried successfully to bring about development. The best method of exploring measures and strategies that can bring about development in terms of increasing national production, causing employment to be brought about, and alleviating poverty lies in finding out the core strategies that enabled the success of such development programmes.

In the  annals of development effort,  failures happen to be the norm. There are very few successes to talk of and a short analysis of such successful programmes is likely to reveal what strategies are required to bring about development.

Having researched for over two decades in seats of higher education institutes in the West it is sad to state that in Western countries not a single programme aimed at Growth has been a success in recent history. The  US understood the problem and developed the CETA in the late Sixties to bring about employment and incomes, but this got dissipated into an organization offering grants to minorities and the poor. The UK spent a massive amount on the Manpower Services Commission in the late Seventies and the maximum it ever achieved  was to have two youth training programmes: The YOP(Youth Opportunities Programme) and the STEP(Special Temporary Employment Programme). They were enlisting youths to follow skills development. Trainees on both  programmes were attached to my Community Center for training when I worked in Community Education in Scotland. I pointed out that the training given was incomplete in that it did not include a method for them to be self employed at the end of the training. This suggestion was booted out. The youths fed back into unemployment and the Manpower Services Commission  too died a natural death shortly afterwards.

Let me detail attempts that were a success:

The Land Grant Universities were a great success in bringing about development in the United States. In 1862, President Abraham Lincoln  signed the  Morill Land Grant Colleges Act, which forever changed higher education in the United States., Hithereto higher education catered to the rich.  The Land Grant Universities were required to do research and to help the development of the State economy. Advancements in agriculture and industry in the USA can be traced to the working of these Land Grant Universities.

Gradually after glorious success the programme lost its steam and continues today marginally as Cooperative Extension. Moreover the USA, with success became complacent and finally believes in the Private Sector as the Engine of Growth. It is easier to rest on laurels of earlier  achievement. It is no surprise that the US Administration has so far failed to undo the 2008 financial upheaval.

Another success is the Comilla Rural Development Program of Bangladesh.  The Government of Pakistan wanted to find the best and quickest method of bringing about development. This task was assigned to Michigan State University. A number of professors in agricultural economics and education were posted to Comilla.  The Government appointed a senior civil servant Dr Akhter Hameed Khan to lead the programme.  They selected the Kotwali Thana of the Comilla District. An Academy- an education cum extension institute was established where the professors from MSU were posted to work with local experts in finding the best methods of bringing about development.  They decided on cooperatives to function with the participation of the people where people will be able to develop their abilities and capacities as they attended to their production work. The cooperators were to save whatever they could afford, however small. This created a commitment.  The village level cooperative was strengthened by a union of cooperatives societies managed by representatives of the local cooperatives which attended to provide the services to the village cooperatives and also provided the frame work to plan and implement development programmes, where support will be provided to the individual projects. A Creamery to make cheese and a tractor station were established. Both were economically fully viable. The Creamery  exists to this day. The village level cooperatives held a meeting of all members weekly where specialists from the Academy participated providing details of new methods of cultivation and also planning for development. Suffice it to state that  this Programme was able to provide full employment to everyone in the area and also doubled the yields of rice the staple crop, all achieved within 1961 to 1969, when this Programme was pursued. The  employment created even spilled over to the adjoining areas and the Kotwali Thana is even today an area of full employment and high incomes within Bangladesh, a sea of poverty.  The Academy exists to this day providing expertise in development activities despite the inroads made by the IMF and the World Bank to negate its  success, by its implementation of the Training and Visit System of Agricultural Extension, which ruined agricultural extension by making the extension staff ignore and not use institutions for extension work.  The  Structural Adjustment Programme took away the right of the Governments to control its finances and imports. This Comilla Programme was based on creating employment, cooperative development aimed at  self sufficiency. This is the major success that can be found. The author was a student of Dr Akhter Hameed Khan at Michigan State University.

Another success is the Rural Development Programs of countries like Sri lanka and the Philippines which provided for the development of income generation activities, through small scale industries established at home and village level. This was based on community development principles where the people participated of their own and developed their abilities and capacities in the process. In the Sixties PowerLooms were also established on a community cooperative basis making Sri Lanka self sufficient in textile manufacture.. Though a success in creating employment, and incomes this got involved in  Party Politics where the newly elected Governments wanted to do something of their own, and undermined earlier achievements.  India was the home of the Community Development Programme, a rural development programme which happened to be the largest development programme ever attempted in a democratic country. However its success was marred because this programme concentrated on making rural infrastructure works with people’s labour without any input for increasing the people’s incomes or abilities. As the Balawantray Mehta Committee of Investigation concluded it became a ‘bricks and mortar  programme” of hard labour  without any benefit for the participants.(Karunaratne; The Failure of the Community Development Programme of India”: Community Development Journal. April 1976)

The Vegetable Purchasing Scheme of the Department for Development of Agricultural Marketing(Marketing Department(MD) in Sri Lanka  was meant to ensure that producers would obtain a reasonable price for their produce and simultaneously ensure that  city dwellers would be able to purchase their vegetables and fruits at cheap rates. Traders who purchase vegetables in the producing areas offer very low prices to the producers and the Marketing Department offered a higher price, the price dependent on the wholesale price in the Colombo Market. Producers brought their produce to the village fairs where traders purchase and the Marketing Department too purchased offering a higher price than the traders. The traders had to increase their price if they were to be in business. The goods purchased by the MD was sent overnight to Colombo and other cities where it was sold at a low rate at Retail Depots. The MD kept a margin of about fifteen percent to cover costs of transport and wastage. The traders generally kept a margin of hundred percent. In the cities traders had to be guided by the sale prices at the MD shops.  At most the quantity purchased by the MD was 10%, but it managed to reduce the margin of profit kept by the traders and thereby control inflation. In addition the MD opened a Cannery which made jam, jelly and juice out of Red Pumpkin, Ash Pumpkin, Oranges and Pineapple. This enabled Sri Lanka to become self sufficient in all jam and fruit juice. The producers benefited greatly because the MD purchased all Red Pumpkin, Ash Pumpkin,  Pineapple and Orange  at  a high price. This Scheme was worked out with great success from the days of World War II till 1977 when the Sri Lanka was asked to close down the Department in 1978 when the Government of the United National Party followed the Structural Adjustment Programme of the IMF. Sri Lanka not only controlled inflation, offered high prices for producers  but also achieved self sufficiency in fruit juice and jam. manufacture. Since its closure the traders rule the roost and they keep a margin of over 100 %. This was a Scheme that helped both the producer as well as the consumer and was a great success. The author was in charge of this Scheme for one full  year. It was a difficult task but accomplished  with great success. It was a unique programme never found anywhere in the world. The IMF tenet was that the Public Sector should not deal with commerce. Accordingly out went the infrastructure that Sri Lanka had painfully developed over the years. Instead now we have rampant inflation with the rich becoming richer and the poor being marginalized.

The Divisional Development Councils Programme of Sri Lanka(1970-1977)  was established to provide employment to youths. It was aimed at establishing small scale agricultural and industrial development projects where youths were involved in production and guided by an instructor till they became successful entrepreneurs.. It was a skills development programme aimed at production that will sustain the project providing incomes for the youths. Many small scale agricultural farms and industries were established. The guidance was in production as well as in sales Its main tenet was the fact that the skills training ended in establishing a agricultural farm or an industry that produced goods, employment and incomes. This Programme brought about employment for 33,000 youths.

Details are provided of the Crayon Factory that I established which became the flagship of the Programme. Sri Lanka at that time was importing crayons and this was a import substitution project. I had earlier worked as Deputy Director of Small Industry and had seen similar projects and fed details known to me to my District Planning Officer who was a chemistry graduate. Experiments were commenced at my residence and when it came to a situation where equipment was required, we took over the school laboratory for this purpose after school hours. The Planning Officer and the School teachers pooled their knowledge and conducted experiments.  At one stage we made crayons but were not satisfied with the quality and sought the help of the university from which the Planning Officer had graduated as a chemistry honours graduate a few years earlier. Despite beseeching help from his own professors he was turned away on the grounds that the professors were busy with teaching and marking answer scripts and tutorials. Despite this set back we continued with experiments and finalized the art of making crayons of high quality. This took a few months.  I decided that the Crayon Factory should be a cooperative project and I selected a cooperative union for establishing this production and sales unit. Youths were recruited and trained on the project. The Cooperative Union was directed by the Member of Parliament of the area Sumanapala Dahanayake and he took over the responsibility for production and sales. The factory was established within a few weeks working day and night and island wide sales were done.  This was a very successful project which within a short period provided crayons all over the island.  It was so successful that the newly elected Government of 1977 wanted to discredit the Project and especially to punish the Member of Parliament Sumanapala Dahanayake and sent a Deputy Director Mr Ariyaratna, to investigate and find fault. This Deputy Director after investigation concluded that the Crayon Factory produced crayons of very high quality and that the industry was fully commercially viable.  This Crayon Factory shows the administrators and politicians working together in a process of action that is a unique in the history of development. This Crayon Industry was established by me entirely on my own initiative to teach the Ministry of Plan Implementation a lesson because the Ministry was shy to establish import substitution industries. Later it was so successful that the Ministry had to accept this Crayon Industry as the flagship of their programme.

However after the newly elected United National Party Government of 1977 embraced the Structural Sadjustment Programme which had as its tenet that all development work had to be done by the Private Sector and not by cooperatives, Coop Crayon died a natural demise. It brought about self sufficiency, employment and incomes to hundreds. It also saved foreign exchange by obviating imports.

A Mechanized Boat Making Factory  was also established under my direction which made seaworthy 40 ft inboard motor boats over the period 1971 to 1977. This was the first cooperative boatyard to be established in Sri lanka. This too was closed down by the 1977  United National Party Government following the policies of  the IMF.

The Self Employment Programme of Bangladesh,  established in 1982, is today the most successful and the premier employment creation programme the world has known. It is yet being implemented by the Ministry of Youth Development and has guided over two million youths to be self employed by February 2011 as reported by the Government to the IFAD(FAO). It began with small beginnings due to the fact that the ILO experiment at establishing a self employment programme in Tangail, Bangladesh in the preceeding there years was an abysmal failure after a massive expenditure. I was the Commonwealth Fund Asdvisor to the Ministry of Labour and Manpower and was confronted by the Military Government, immediately after they took over, as to what I could contribute to the economy of Bangladesh. At that time the Ministry provided skills training to 40,000 youths a year and as usual  skills develeopment programs kept off the task of guiding the youths that passed out. As usual the trained fed into unemployment. I suggested that as much as we provide skills we should also commence guiding youths who wished to be self employed to establish  their own projects. This was approved and I with Bangladeshi administrators took over the task of training the  staff in economics and motivating the youths who were being trained to establish small projects in their home areas. The training staff provided guidance in how the projects were to be established and guided the youths in all aspects of production and sales. This was a novel  idea of guiding youths, enabling them to develop their abilities and capacities in establishing the  commercial projects. The training institutes that had hitherto only trained them in skills was also charged with guiding the youths when they got into production. In detail, the training institutes that attended to sewing and dress making kept their doors open after instruction time till late at night to enable the trainees to make dresses which were commented upon and redone with instructions from the Tutor Lecturers. Similarly in dairy and animal husbandry  small scale farms were established where what was taught was put into practice. The staff of Youth Development was trained in how to establish production ventures including  economics  concepts. The youths were guided in how to establish and develop their projects to create incomes. In the first two years the staff was guiding 2000 youths and the project was guided by me and the Directors. My task was to establish the project, train the staff to continue after my two years ended. Bangladeshi administrators who were trained by me did wonders to develop the programme and today it guides 160,000 youths annually to establish enterprises. Over 2 million enterprises had been established by Feb 2011 and the Programme has expanded apace.

. This programme  was enhanced with loans  when necessary and today this programme stands out as a success, in the face of many large scale programmes of skills development which only provide the skills input and forget the students after they have passed out.  There are gigantic skills development programmes today, like the TRYSEM and the IDRP of India which only provide skills development.

This Programme was implemented without a budget. Funds were denied because of the failure of the ILO Programme. Guiding the trainees to become employed was interpreted as a part and parcel of training and the small expenses incurred for further training in how to draft an employment project and supervision was done within the normal training budget., This Programme proves that employment creation can be done by redeploying officers and re orienting the design.

Flowing from these instances of success we have to arrive at how a new algorithm can be built up for the economic success of all countries that are today saddled with foreign debt and have thereby become ‘colonies’ of the Superpowers today.

1. The Freemarket Neo Liberal Model which is yet being purused by bthe IMF and the WB is a non runner. This was introduced only in the Seventies and in the four decades that it has been implemented this Model has made all sovereign countries that did not have a foreign debt indebted. Greece has had a foreign debt for long but it was contained till it joined the EU and went on an additional spending spree which accentuated the situation and brought it down to be a pauper today
2. The foreign debt of these countries  was created by the IMF through its ridiculous Model of allowing borrowing to spend, without gearing the expenditure to create production and incomes and therefore the countries should be  absolved the responsibility of repaying  the debts. The creditors should also have looked into how the money would be utilized. Thus the creditors too are doubly responsible.
3. The countries have to get out of the NeoLiberal Freemarket Globalization model where the people are provided with skills and urged to go to  the Developed Countries where they end up as menial workers sending back a pittance to their relatives. Instead the people should be provided assistance, loans,   training and guidance  to make everything they need for sustenance and earn a living wage in the process
4. Community Cooperatives are of great importance to ensure that the industries and agricultural farms  already established do not move out of the rural areas.  Today many private sector projects close down because they cannot find a  high level of profit. This is not in the case of community cooperatives, because the cooperative also belongs to the community members. In recent years in Scotland, Edinburgh Crystal closed down. In Canada Blue Mountain Pottery closed down. Both of these were very successful industries and hundreds of trained workers were laid off. The industries  were profitable but the owners were not satisfied with the profits. The answer to this problem lies in Community Cooperatives.  The Crayon Factory of Sri Lanka was a community cooperative.
5. Self sufficiency has been a major criteria and  is the basis for the success of the income generating projects.
6. Skills Development should  also include the dimension of guidance to enable trainees become self employed
7. National Planning has to be done to develop the resources in the country and provide the employment for its people and bring about incomes for them. This is the main task of any Government.  In the Neo Liberal FreeMarket Economic Model of the IMF, no national planning can be done and the Government cannot take any action to establish the infrastructure necessary to achieve development.
8. The success of the Land Grant Universities to bring about development in the USA tells that higher education has to be aimed at development in terms of creating projects and guiding them to success. There is no point in training unless training is geared to create employment and incomes and in this regard the success of the Comilla Programme and the Self Employment Programme comes into focus. Both were great successes and in them lies the ingredients that can bring about growth. The Comilla Programme doubled the yields of rice, the staple crop and achieved full employment while the Youth Self Employment programme has so far guided over two million to be self employed. Therein lies the nucleus for creating employment and incomes. Youth development must be meaningful to the youths by equipping them not only with skills but with a package of employment and incomes, which is the hallmark of this Self Employment Ptrogramme, the only programme of this dimension in the entire world today.
9. There should be reliance on both the public sector as well as the private sector. The Governments have to play a major role in developing the infrastructure for development. Relegating the State sector to the background is a key method used by the IMF to sabotage development.
10. Privatization is also a method used by the IMF to sabotage development. Every country has an infrastructure designed to serve the people- to control inflation- to avoid people being fleeced by business magnates in their craze at gaining profit. In Sri Lanka the privatization of the Marketing Department’s Cannery by the United National Party Government meant that thenceforth a country that was self sufficient in making fruit juice, jam and jelly ceased to produce and instead jam and juice was imported. Producers who gained from the floor prices given by the MD cannery for pineapple, red pumpkin and ask pumpkin, found no buyers for their produce and suffered loss of income. All this while juice and jam makers in Australia, the United States and Singapore had roaring sales.  Lets take what happened when Ceylon Oxygen  was privatized:  When Ceylon Oxygen was in the public sector , the profit went to every citizen of Sri Lanka, because the profit was used by the Government  for the  cause of the public…. After privatization the profit goes- 60% to  Norse Hydro of Norway, 10% to the employees and the rest 30% to shareholders, most of whom are from Europe and the USA.”(From Karunaratne; How the IMF Ruined Sri Lanka) . Privatization as insisted on by the Troica on Greece is also designed to take away profits from Greeks to the outsiders that invest in them.  The people of Greece are the net loser. The gain is for investors in the USA and EU.
11. No new funds are required for development. Every country has a plethora of development programmes.. What is required for these existing programmes to be reoriented with skills training, with necessary and entrepreneurial guidance when necessary. Officers have to be re trained and re deployed. In the Youth Self Employment Programme all Youth Workers became more economists.  When machinery has to be imported too no new allocation is required. The funds earmarked for imports can be utilized to import the machinery instead of importing that item.
12. Quick action is of the essence for youth employment,  before the youth go astray and become subversive. In the YSEP speed was of the essence. Swift action motivates both officers and youths to achieve aims that look unattainable.

 

Finally ,  the IMF should allow  every sovereign country the right  to handle their own economies and their assets including foreign exchange. The current method of  forcing the countries to liberalize  the use of foreign exchange and even get into debt to enable this liberty  and extravaganze is non developmental.”(From Karunaratne: How the IMF Ruined Sri Lanka: Godages, Colombo) Privatization of State held assets as recommended for Greece and is being done in UK today will only serve to aggravate problems. It is time the IMF puts its house in order and become developmental.

. The bear fact remains that the Third World countries  were led to become indebted by the IMF  and the IMF and the World Bank cannot absolve itself of this  responsibility. The IMF structured their economies from the Seventies to provide for the development of the Developed Countries by way of making them colonies once again- to produce and export raw materials and  become the consumers for goods manufactured in Developed economies. These countries have now become  the field for exploitation, now called investment. The investors work on tax holidays when no taxes can be charged but consume the assets of the countries, making riches for the companies and their countries because they have to pay taxes in their home countries. Greece is also a casualty in this regard.

.It is hoped that these thoughts on strategies to achieve development should help not only Greece but also all Third World countries that are relegated by IMF policy to the scrap heap today.

Garvin Karunaratne

30 th July 2015