The Davos Farce
Posted on January 17th, 2017

By Garvin Karunaratne, Ph D.

At this very moment 2500 or more of the world’s most influential people are gathered in Davos, Switzerland   to discuss the most pressing issues facing the world. This Economic Forum  is committed to improving the state of the world”.

It is ironical that the USA, the most important and influential of countries is represented by the outgoing leaders-Secretary of State  John Kerry,  Vice President Joe Bidden who cannot in any way commit to the path that the USA will take on under President Elect Donald Trump.

What is the World that Davos is  trying to improve and develop?

Looking at the World today one finds that even the Developed Countries are facing major problems. The USA is yet to recover from the  onslaught on its economy staged by its own financial institutions of repute. As Professor Joseph Stiglitz said,

” The financial markets have mismanaged themselves… They allocated  hundreds of billions of dollars  to mortgages beyond people’s ability to pay. They didn’t manage risk. They created risk While financing firms were messing up our economy they garnered for themselves over a third of all corporate profits.”(People First Economics: Ed Ranson & Baird.)

The current recession commenced in 2007 and all the king’s horses and all the king, men have failed to remedy the situation yet. Even today, full eight years since the economy grounded  the citizens are unsure whether their own  dollars held in reputable banks are safe. Home owners find that their homes have no value, a situation  that is not faced by even citizens of the Third World. The USA is today a debted nation . In 2015 the national debt was as much as $ 18.8 trillion.  The citizens voted for a new President who does not belong to either the Republicans or the Democrats the two parties that ruled again and again, and they hope for deliverance from bankruptcy which many face today.

Take Europe, the European Union is in grave trouble with Britain deciding to march out and some of its countries facing problems. Greece is in the dog house. With its economy in tatters. The Greek citizens are helpless,  with rising unemployment, pay cuts and austerity demanded by the EU. Greece has to beg the European Union for funds. Funds are given and  like in the case of the Third World countries funds given on loan are paid back to the creditors of the Developed Countries and Greece limps on till the next loans are due.  It is a question of the richer EU countries benefiting.

The benefits accruing to  major European Countries due to the Greek Financial Crisis is immense. A Study by the Halle Institute for Economic Research states that Germany was able to balance its budget because of the Greek Crisis. ‘The Study attributed a significant part  of Germany’s balanced budget to the Greek Crisis. Berlin stands to make money from the Crisis even if Greece reneges on its debt. The Study also concludes that while Germany benefited most, the US, Netherlands and France too benefited”(Germany Profitted from the Greek Crisis: Study Reveals, USA Today 12/8/2015)

(From  How the IMF Sabotaged Third World Development by Garvin Karunaratne)

The countries of the Third World are held in a firm grip through the debts they owe the Developed Countries, their IMF and banks. In the Sixties these countries were not in debt. They managed their outgoings with their incomes through a process of controlling their imports and allocating  their hard earned foreign exchange in the national interest.  Then came the IMF. As stated by me;

Whenever a country could not meet its financial commitments as did happen when the Middle East countries increased the price of oil  threefold in the Early Seventies they flocked to the IMF for Aid. The IMF then imposed its conditions to be followed  and the countries had no option other than to agree… The variety of conditions imposed  comprised  liberalizing the use of foreign exchange, taking the control of foreign exchange  out of the hands of the Government. Instead it was to function as decided by the market forces of supply and demand which really meant that it was handled by the banks- the banks decided the exchange rate…This led to devaluation. Foreign Exchange use was liberalized… an entire decade of economic blunders by the IMF shows how the countries became burdened with debt with the result that they had to get more and more loans to service the debt.” (From: How the IMF Sabotaged Third World Development)

This process of bankrupting the Third World countries was organized by the donors themselves as confessed by John Perkins, a foreign consultant who admitted that he fabricated statistics and drafted programs where the foreign exchange provided went back somehow- through consultancies, and other charges back to the donor countries while leaving Ecuador indebted to the extent of the loan. (From Confessions of an Economic Hitman by John Perkins).

For the World Economic Forum to play a major role in development it had better address the economic problems that all countries- the Developed as well as the Third World countries face today.  It is a new Paradigm for Development, a New World Order  that is required to bring prosperity to all countries.

Garvin Karunaratne

Author of

How the IMF Ruined Sri Lanka and Alternate Programs of Success, Godages, 2006

How the IMF Sabotaged Third World Development, Kindle,2017

17/1 /2017

 

3 Responses to “The Davos Farce”

  1. NeelaMahaYoda Says:

    Gavein

    Ranil will not be felt out of place because there is another well known Lebanese clown Sabine Choucair, has a totemic place. She wrote on her blog recently that she was baffled to be invited and had not heard of the forum before….. But what, both Ranil & she wondered, were the rules of engagement for clowns at Davos: “Should I try to meet specific people? Would it be wise to give out clown noses with our crazy business cards?”

    But for Ranil wickremasinghe who is coming here for the second time expect better deal from world’s top class popular hedge fund managers this time around. Legally, hedge funds are most often set up as private investment limited partnerships that are open to a limited number of accredited investors and require a large initial minimum investment. Investments in hedge funds are illiquid as they often require investors keep their money in the fund for at least one year, a time known as the lock-up period. Withdrawals may also only happen at certain intervals such as quarterly or bi-annually. This is what exacly Runil needs

    However, for the incoming US president and his political advisers, like Steve Bannon, who will be chief strategist in the Trump White House, has denounced “the party of Davos”, which he regards as a rootless global elite that has little concern for the common person or the nation state. (https://www.ft.com/content/f9f4b23a-b711-11e6-961e-a1acd97f622d)

  2. Kumari Says:

    I have heard Davos Economic Forum is organised by a group of private financiers. It is not a government backed / organised forum. Lot of bigwigs pay for their travel and stay. Ranil and Ravi’s bills will be met by Sri Lankan goverment. This duo will enter into more deals to sell the country for cheap. They may become very popular among the wealthy.

    Apparently SL government paid for the 50 strong teams’ attendance at the World Cup Rugby Finals held in the UK in Oct 2015. MPs Harin Fernando and Ruwan Wijewardena were among them.

  3. Cerberus Says:

    Agree with Mr. Gavin Karuanaratne. Last year RW went to Davos in Switzerland with 40 of his lackeys and appears to be doing the same this year. The visit to Davos did not bring any benefit for Sri Lanka and it is a very expensive place to visit since it is a meeting place for billionaires. Poor taxpayers have to pay for all this nonsense. A room is supposed to cost over $2000/night. I wonder if they were all in one room to save Sri Lanka money. I doubt. At a time when the rupee is going down fast and we hardly have funds for day to day operations according to My3 why are we wasting so much money on these jaunts? They had sent a team of 50 for a Rugby game in U.K also last year as per Kumari. How can they waste public funds if they have any conscience? This meeting is for Billionaires to meet potential traitors like Ravi and Ranil who appear to be willing to sell the country cheap to the Billionaires.

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