Originally published September 20 2014
Economies in Ebola-affected countries are stalling
by J. D. Heyes
(NaturalNews) In what may be an ominous warning for taxpayers in the U.S. and around the world, officials with the International Monetary Fund (IMF) have said that, as the economies of more Ebola-affected countries continue to sputter, they could require hundreds of billions of dollars in financial aid that will only worsen debt in those nations.
As reported by The Wall Street Journal (WSJ), the IMF, in recent days, has issued a warning to the developed world that the current Ebola epidemic in West Africa -- the worst outbreak of the disease in history -- will require "large scale" global economic intervention in order to shore up economies that are being ravaged as they deal with the widening crisis.
The IMF, the world's emergency lender, said it is in talks to boost bailouts for Sierra Leone, Guinea and Liberia as the disaster slams economic output and overwhelms government financing. Each of the three countries faces a financing gap of between $100 million and $130 million due to the havoc hitting agriculture, trade and other commerce, the fund said.
Hundreds of billions could be needed
"Beyond the human toll that this outbreak is exacting, the Ebola outbreak looks set to cause significant harm to the economies of Guinea, Liberia and Sierra Leone," IMF spokesman William Murray told a news conference recently.
The poor fiscal outlook is a change from earlier estimates, in which analysts and economists had predicted a brighter year for a number of the historically poor governments that are currently battling the Ebola virus, which is taxing national healthcare systems.
WSJ said that, for example, Guinea -- which experienced five decades of misrule by a series of dictators but finally became a democracy in 2010 -- was set to auction off rights to a multi-billion-dollar iron ore operation. Liberia, meanwhile -- which has seen a brutal 14-year civil war ravage the country -- had already begun auctioning off blocks of offshore oil-drilling sectors. And Sierra Leone looked ready to become the African continent's fastest-growing economy for the second time in the past three years, according to IMF analysts.
However, the analysts now believe that the Ebola epidemic is liable to stunt growth in each of those nations: down to 8 percent in Sierra Leone from a growth rate of 11.3 percent last year; 2.5 percent for Liberia, or half of last year's growth; and down to 2.4 percent in Guinea, down from a previously estimated rate of 3.5 percent.
Murray said the IMF is currently in negotiations to expand each country's present financing programs to make sure that they will have enough resources to fight the outbreak and keep their economies solvent.
"We'd like to move on this as quickly as possible," Murray said. "A large-scale and well-coordinated intervention by the international community is urgently needed to help bring the epidemic under control."
Border closures, lack of trade hurting economies as well
The German news service Deutsch Welle reported that other Ebola-related restrictions that are harming these countries' economies include travel bans and lack of trade:
Up to 400,000 people suffer from hunger in Ebola affected regions as a result of blocking trade routes. Economies of these countries have also been weakened says Jochen Moninger. He works in Sierra Leone for the Welthungerhilfe, a German development organization that fights global hunger and promotes food security.
But other analysts believe that IMF loans are the last thing that these habitually poor countries need. For decades, since the Marshall Plan was implemented to assist the devastated countries of Europe following World War II, the mindset of international financiers was that countries could borrow their way to prosperity, according to the Committee for the Abolition of Third World Debt (CADTM).
What's more, the poor governments that have done the bulk of borrowing -- including some of those nations currently battling the Ebola virus -- have not always been led by moral or ethical men. Funding from the IMF, which was supposed to go to infrastructure and other development projects, was not always spent wisely.
"In many cases, the living conditions of hundreds of millions of people in the World have been degraded as a result of the debt based policies forced on them by the World Bank and the IMF with the complicity of their own governments," wrote Daniel Munevar, former fiscal advisor to the Ministry of Finance of Colombia and special advisor for foreign direct investment in Ecuador, and Eric Toussaint, PhD, political scientist, historian and president of CADTM.
In addition, funding for the IMF has fallen off in recent years, due to borrowing governments paying off their IMF debts. So the lender needs new clients or, at least, needs to boost the lending to existing clients, even if they are least able to pay back loans.
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