debt & development

[dhenwood@xxxxxxxxx (Doug Henwood)]

I should have added to that previous post that one important reason that
Korea didn't get killed by debt was that it had a reasonably honest &
competent national economic planning agency that borrowed and admitted FDI
in accordance with a conscious development strategy. It was capitalist
planning, for sure, but it was most definitely planned; spillover effects
were laid out in advance (e.g., the state steel company, set up in
violation of World Bank advice, derived important orders from the
shipbuilding industry; the shipbuilding industry was stimulated by orders
>from Korean exporters; etc.). The financial sector was "repressed," as they
like to say around the IMF, with favored sectors receiving below-market
interest rates, and all financial flows were strictly regulated. Mexico, of
course, did none of this, following all the advice of the IMF and MIT.

Doug

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Doug Henwood
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