Tagged "foreign exchange"

Teresa Hayter’s ‘Aid as Imperialism’, was one of the first somewhat critical texts written about the post world-war II monetary institutions, from a so called insider’s view. Having spent some time employed at the Overseas Development Institute, the World Bank financed Teresa’s research on the effectiveness of aid packages provided to Third World countries. Given it was intended as a publication on behalf of the ODI, one certainly encounters a report which offers an objective overview of the various policy approaches that these institutions taken. The first half of the text, is an outline, not a critique. The second half turns to evaluating the implementation of these approaches in several countries. Here is where we find a critical evaluation, which best portrays the inflexibility of foreign aid packages, which, Teresa believed, were given more so as blanket prescriptions, dogmas even. A standard buffet of currency devaluations and austerity measures — liberalize, liberalize, liberalize! It is for this reason that the Overseas Development Institute rejected the original report for publication. Fortunately, it eventually made it’s way to us common readers. The following is an excerpt from the text, focusing on the involvement of these aid agencies in Chile, a country which is emblematic of the deep difficulties of modernization and sovereignty in the global periphery.

In looking to imagine and crystallise potential alternatives to the seemingly unending vortex of underdevelopment and poverty in third and second world nations, an understanding of the deficiencies and insufficiencies of the current macroeconomic arrangement is an obvious starting point. The post-Bretton Woods monetary consensus, which promised to guarantee mutual ‘real growth’ through endless liberalization of domestic markets and fluctuating exchange rates, has in whole been failure for developing countries. Instead, of self-sufficiency and self-confidence, there isn’t even what one one called ‘multi-lateral beneficence’, but rather, a reliance and dependency on the most powerful players in the game, at the mercy of commodities swings and speculative exuberance (rather than being ’liberated’ and domestically sound, buffered from ‘shocks’). One wonders what one would do if they swapped shoes. What shall we do once we take control of these responsibilities?