https://en.sputniknews.africa/20230417/1058740815.html
Africa Turning to China for Loans as IMF Austerity Demands Ruin Nations
Africa Turning to China for Loans as IMF Austerity Demands Ruin Nations
Sputnik Africa
The IMF's demands that countries raise taxes and cut public spending in return for development loans have impoverished much of Africa.
2023-04-17T19:06+0200
2023-04-17T19:06+0200
2023-04-21T08:47+0200
opinion
international monetary fund (imf)
loan
investment
china
https://cdn1.img.sputniknews.africa/img/07e7/04/15/1058740977_0:0:3076:1731_1920x0_80_0_0_fa47d7bd7e1416e70ba96888204c2297.jpg
The International Monetary Fund (IMF) faces competition from China as African nations reject its austerity demands, an academic says.A new report by British charity Oxfam found that 13 out of 15 IMF loans made during the second year of the COVID-19 pandemic required the countries receiving them to introduce austerity measures, including raising taxes on food and fuel or cutting public spending, including on healthcare.Linwood Tauheed told Sputnik that "the IMF giveth and the IMF taketh away."The reason the IMF wants to get poorer nations into the debt trap, the academic said, was to ensure that "the Western countries have control over not only the finances of those countries, but also the resources that those countries need to sell to the West in order to get the dollars in order to pay off those loans."While the IMF has stuck to that strategy for decades, it doubled down during the pandemic to impose "even greater sanctions on countries that need all of the income they can generate just to buy vaccines and and other kinds of of of healthcare items in order to keep their population from dying of COVID," Tauheed said. "If you can't pay, well, then you have to sell your country and the resources of your country and maybe cheap labour in order to pay off their debt."By contrast, China's loans to African states come with no such strings attached, he stressed.For more in-depths analysis, check out the latest episode of Sputnik's podcast The Critical Hour.
china
Sputnik Africa
feedback@sputniknews.com
+74956456601
MIA „Rossiya Segodnya“
2023
Sputnik Africa
feedback@sputniknews.com
+74956456601
MIA „Rossiya Segodnya“
News
en_EN
Sputnik Africa
feedback@sputniknews.com
+74956456601
MIA „Rossiya Segodnya“
Sputnik Africa
feedback@sputniknews.com
+74956456601
MIA „Rossiya Segodnya“
international monetary fund (imf), loan, investment, china
international monetary fund (imf), loan, investment, china
Africa Turning to China for Loans as IMF Austerity Demands Ruin Nations
19:06 17.04.2023 (Updated: 08:47 21.04.2023) The IMF's demands that countries raise taxes and cut public spending in return for development loans have impoverished much of Africa. Linwood Tauheed, associate professor of economics at the University of Missouri-Kansas City, said that China is lending money for development projects with none of those strings attached.
The International Monetary Fund (IMF) faces competition from China as African nations reject its austerity demands, an academic says.
A new report by British charity
Oxfam found that 13 out of 15 IMF loans made during the second year of the COVID-19 pandemic required the countries receiving them to introduce austerity measures, including raising taxes on food and fuel or cutting public spending, including on healthcare.
Linwood Tauheed told
Sputnik that "the IMF giveth and the IMF taketh away."
"In order to get those loans, those countries have to agree to austerity cuts in social spending," Tauheed said. "Even if some of the loan is spent on social programs, that is taken out of the economy in order to pay off this debt."
The reason the IMF wants to get poorer nations into the debt trap, the academic said, was to ensure that "the Western countries have control over not only the finances of those countries, but also the resources that those countries need to sell to the West in order to get the dollars in order to pay off those loans."
While the IMF has stuck to that strategy for decades, it doubled down during the pandemic to impose "even greater sanctions on countries that need all of the income they can generate just to buy vaccines and and other kinds of of of healthcare items in order to keep their population from dying of COVID," Tauheed said. "If you can't pay, well, then you have to sell your country and the resources of your country and maybe cheap labour in order to pay off their debt."
By contrast, China's loans to African states come with no such strings attached, he stressed.
"They don't have austerity, what's called structural adjustment processes," Tauheed said. "So countries that are borrowing money can use that to increase social infrastructure and programs without having to raise taxes and impoverish the people in the country at the same time."
For more in-depths analysis, check out the latest episode of Sputnik's podcast The Critical Hour. 
