Over the last couple of months, we have seen cracks starting to get wider and deeper within the global economic system. One of the main poster children of such a catastrophe is Sri Lanka.
Sri Lanka could be seen as a failed state, the politicians have to literally run away from its citizens fearing a French revolution-style coup where they could be hanged or shot and paraded among its citizens. Sri Lanka is another tail of debt-trapped diplomacy.
Even though the situation is more complex than that and there are other factors affecting Sri Lanka’s growth, it’s obvious that bad debt is one important cause of the current crisis.
Although Sri Lanka, is the latest country to fall under this problem, it will not likely be the last. Being in the Caribbean, I have seen and read about the perils of borrowing money without a clear plan of action to pay it off.
Even though the actions might seem rational to borrow money from IMF, The World Bank, and other financial institutions, you must be careful with who you are planning to get in bed with.
When you approach these institutions to borrow money, you are basically giving up a portion if not all of your country’s sovereignty in order for money. You are basically selling out your country’s citizens at this point.
If you are not smart and don’t have a viable exit plan, you can tie yourself up so much that it will be hard to untie all the bad decisions you’ve made for your country.
For decades entities such as the IMF have used debt to trap countries and keep them under their influence.
Disrupting local policies which span across all sectors of society whether it be economics, social, human rights or other issues is very common. Balancing the cost and risk of these decisions should be taken into consideration.
Using Jamaica for example, in the late 80s and early 90s, Jamaica’s agricultural economy was ravaged due to these policies. Jamacia was forced to accept agricultural imports of certain goods which we had the means to produce and suppress our local agricultural development.
Actions like these hindered our local agricultural economy which is vital for a nation’s self-sufficiency which is critical in a period like this. Where we are witnessing deglobalization and a rolling back of the global and trade networks, that was critical for the production and movements of cheap goods across the globe which we all benefited from.
It remains to be seen how worse the situation will get but let’s just hope for the best. The main point is that Jamaica was at the behest of these policies being forced upon us by IMF which was non-negotiable for us to accept.
These debt traps are a way for these first-world countries to impose their will on developing nations. It’s a remnant of the colonial past that relishes the master-slave relationship. Whatever the master says you will do and if not, you will face repercussions.
In a world where policies are beginning to converge among nations into a one-world system, it’s a worrying sign, especially within the western hemisphere where the superpowers are looking to consolidate their power in order to maintain their status quo amongst the smaller nations.
