Message-ID: <Pine.A41.3.95q.970607112709.32774A-100000@paris.NMSU.Edu> Date: Sat, 7 Jun 1997 11:43:35 -0600 From: JC WANDEMBERG <mailto:juwandem@NMSU.EDU> Subject: IRRESPONSIBLE LENDING To: mailto:DEVEL-L@AMERICAN.EDU
On Sat, 7 Jun 1997, Richard G. Dudley wrote: >
> I think the Transparancy International approach of holding such
> creditors responsible for the debts is a good one, but I wonder how
> "well-documented" such cooperation usually is. Surely those who stole
> the money are the "most" responsible.
Surely, but nowadays (particularly because of so many corruption schemes) creditors must ensure their money is properly used and SHOULD be held accountable for the inappropriate use of loans, specially because it is the citizenry who are going to have to live with the consequences! Unfortunately, the creditors dominate the situation and use the WB and IMF to squeeze as much as they can out of debtor countries forcing them to overexploit their resources in order to service their debts while cutting health and education budgets (for a case in point see Ecuador's external debt)
> Exactly where is the line drawn between a theft and a business deal?
I'm afraid it all depends WHO draws the line!, if it's drawn by a big corp. it's going to be very difficult to show it's theft.
> Say, for example, loans to set up a 'national' auto import/manufacturing
> plant where the presidents son is the loan recipient, and receives an
> exemption from the 60% import duty that other importers have to pay.
> Surely banks would think this was a great investment since the
> competition doesn't have a chance. And then the son can influence his
> papa to say that all government agencies have to buy his "national car"
> (which is actually made in another country).
>
> Should banks be responsible for the losses if this scheme fails?
They sure should!
> What if they were forced into the loan arrangement by papa president?
yeah right!
Regards, JCW