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... the WB had to figure out why its projects yielded low returns.

Of course for an infrastructure loan, such as for a hydro-electric project or a road to yield an "acceptable" return there needs to be additional loans to projects that make profitable use of that infrastructure. The IMF was hardly going to finance "socialism" by investing in factories. That might cut into revenue streams from existing private investment in countries supporting the IMF.

It was easier to turn a blind eye to local elites skimming a sizable "take" off of the original loan in return for them using the coercive power of their state to extract the payment from those who derived little to absolutely no benefit from the project, such as by squeezing the money out of existing agricultural producers or allowing the development of the land inhabited by indigenous people -- "Shock Capitallism" in action.

"It is not necessary to have hope in order to persevere."

by ARGeezer (ARGeezer a in a circle eurotrib daught com) on Mon Dec 19th, 2011 at 07:25:46 AM EST

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