University Daily Kansan / Wednesday, October 22, 1986
5
Debt
Continued from p.1
the most expensive hotel in Washington. It is like a night," Feltenstein said. "Every day they would have these elaborate caterings with buckets of caviar and champagne."
The World Bank and the IMF, founded in 1944, are the world's largest sources of aid from several countries to poor countries.
The biggest problem for many debt-ridden countries has been a history of mismanagement and corruption from the governments of the Perons, Battistas and Pinochets of Latin America. Feltenstein said.
"People don't realize the magnitude of money that has been taken," he said. "For example, if all of Argentina's dollar holdings abroad were repatriated, it could pay off the entire foreign debt."
Argentina owed $6 billion to other countries and banks in 1976, he said. Now the country owes about $50 billion, the third-largest foreign debt in the world.
While the country was borrowing this money, investment was declining he said. Less was being built.
"The question is where did all the money go?" Feltstein said.
accounts.
Feltenstein described the process this way: "The Central Bank is my friend. It borrows money and then lends it to me."
A lot of it went into the private pockets of speculators, he said, and was deposited discreetly in Swiss bank
it to me.
"It take that money and deposit it in a Swiss bank account, so the result is that Argentina has the debt, but not the money."
accounts.
the money.
Argentina also lost a lot of money between 1976 and 1981 because "people just went crazy buying imports," Feltenstein said.
Some countries object to devaluing their currency, he said, because they say it will hurt the poor.
The real reason is that it makes black market transactions in currency less profitable, he said.
monamed El Hodri, professor of economics, said the situation made banks worry that they might not get
"The more you think about it, it looks like a banker's crisis," Elhodri said.
crisis. El Dourdain said Many banks in the mid-1970s pushed oil-producing countries to borrow more because the banks expected oil prices to continue rising.
"I have a friend in the government of North Yemen who told me. We used to tell these bankers we don't need
El Hodir said, "Some people think the bankers have conspired, but they were just doing their job. If you work in a bank your productivity is measured by the amount of money you loan out.
He said they always answered, "Good, you can use it later."
"I don't believe in conspiracy theories. Bankers aren't that smart. If they were, they wouldn't be bankers."
Robert Oppenheimer, professor of history, said Argentina had borrowed money to cope with the very real problems of hunger and poverty. In addition, leaders expressed a desire for rapid development.
this money,' '' El Hodiri said.
Argentina's food production wasn't enough to feed the population, he said, so the country had to import food.
The population in most South American countries has doubled since World War II, he said, and the population of Mexico probably will double again in the next 15 years.
"Even in Argentina, farmers would rather raise cattle than grow grain, because it is subsidized," he said.
system protecting domestic industries from foreign competition — was the root of many problems. Van Wynbergen recently was in Lawrence for a seminar.
The indebted countries need to export to get the money to pay the installments on their loans, but trade barriers stop them, he said.
The U.S. government wants the countries to pay their debts, but if they run a trade surplus, the United States increases its taxes on their exports, he said.
If the countries don't pay, bankers pressure the governments to cut social security, welfare and health services.
The 16-cent difference is protectionism, he said. The Filipino sugar industry, which directly employs a million people, is in serious trouble because of the trade barrier.
As an example, van Wynbergen said the United States over-charged on sugar imported from the Philippines. Sugar from that country cost 20 cents a pound here, but it costs 4 cents a pound in the Philippines.
If many of those people became unemployed, he said, a revolution would be possible.
Texas protesters charge brutality
Bank
appointed board of 24 directors.
Continued from p. 1
If a country wants a textile plant, its proposal first is evaluated by the staff. Then the plant is designed and the loan prepared. The final loan package contains all the details of the project, he said, and the board votes on it.
In effect, he said, the IMF is telling countries how to handle their internal economies.
Feltenstein said the IMF gave short-term loans to ailing economies and often demanded severe budget cuts, so called austerity measures, in return.
"There was no justification for this," he said. "We took over the building, granted, but we didn't do any damage and the amount of violence perpetrated on us was completely out of proportion for what we did to them."
details of the project, the staff, and the board vetoed it.
The International Development Association is an affiliate of the World Bank that makes 50-year non-interest loans to the poorest countries.
United Press International
The result is that IMF representatives are disliked in many parts of the world, especially in Latin America, while World Bank representatives are liked, he said.
with a misdemeanor count of disruptive activity in Monday's incident, told a news conference that the police use of force was unjustified.
AUSTIN, Texas — A group of anti-apartheid demonstrators arrested for barricading themselves in the president's office at the University of Texas complained yesterday of physical abuse by campus police.
physical abuse by campus police. The protesters, who were charged
One of eight women arrested said an officer kicked her knee.
University student Marc E. Salomon, one of 16 people arrested, said police used "fascist tactics" in the demonstration using the demonstrators from the office.
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