Last Update - Sun May 11 2025
Info slide:
During the recent economic crisis, the International Monetary Fund (IMF) has provided certain conditions to developing countries for receiving loans. These conditions require governments to adopt more market based economic policies. Targets include reducing government budget deficits and increasing international currency reserves. The policy conditions provided by the IMF include..... 1) reducing or eliminating fuel subsidies and fertiliser subsidies; 2) setting the currency exchange rate to international market rates; 3) implementing market-based interest rates; 4) anti corruption provisions.
Madrid WUDC 2023
Open Quarterfinals Room 0.06
Hadar Goldberg, Tamar Ben Meir & Ellie Stephenson, Sophie Shead
80+
CG | CO
MG GW | MO OW
Economics
Hadar Goldberg | MG
Youtube Link (Timestamped): HERE
I'll make one point in my speech. It’s gonna be better than anything that was said before, and it’ll win. I'll just start with one piece of weighing and one piece of rebuttal, and then I'll show you why we think that we don't want blanket policies on all countries but rather tailored, specific policies that are good for the economic circumstances of each individual country in which we will improve. Also, why governments are likely to make good decisions on the counterfactual, filling in the link that OG lacked and OO seemed to challenge.
Before that, one piece of weighing and one piece of rebuttal.
Weighing: Andrew (PM) starts his speech by saying we're going to be contingent on their analysis on why the IMF makes bad decisions. You know why I’m so happy that it takes them out of the debate? Because the infoslide literally tells us what decisions the IMF is going to make. I don't need to analyze any part of this. So this is why you think most of OG was the effects of crash. If we just show concretely why the specific policies in this debate are often bad for countries, we are much better in showing why this will lead to bad decisions as opposed to some abstract, “there are differences between developing and developed countries,” which don't ever link to why this means that these policies aren't also good for developing countries, like OO suggests.
Secondly, response to OO: I want to point out literally all of OO’s material is contingent on one link, which is to say that governments are likely to make bad decisions even if they know that it's bad. I want to point out that OO individually had just one reason for this being true, and that is electoral pressure—governments of populism, they want to win more votes even when it means giving people gifts.
We come to a POI and ask them: why did the British people vote out Liz Truss, who did give people gifts and was a populist? We get the answer that some constituencies are smart, and some of the constituencies are less. Putting aside that I don't personally think the British constituency is smarter than constituencies in developing countries, and I think many people can still see in their eyes when prices increase and there's inflation, we have several reasons to think that specifically, the populist case here is honestly quite weak.
a) We think that citizens, especially in times of crisis where economic crisis is the main thing on the headlines and the news, are very much aware of mismanagement by government and do hold them accountable to this. Especially when inflation, in particular, is something that is very tangible and easy for me to see. I don't need to have a complex understanding of macroeconomics to say that prices are higher than they were a month ago, even though it's been just a month. So we think people are going to hold governments accountable to it for good reasons.
b) Secondly, note that in many developing countries, there actually isn't really much of a democracy, meaning that you are not held to many election processes where you care about immediately being elected and giving people gifts, but rather, you actually have long-term incentives as a leader who is going to stay a leader for life or for many, many years. Meaning that you do care about the success of your economy at large, even when it's temporarily unpopular.
Rest of the rebuttal will be integrated. Let’s get to the points.
Firstly, why do we think oftentimes these care policies are bad for governments?
I want to point out what our burden here is. We don't have to prove that in all or even most cases these policies are bad for them—only that in the cases in which they are changing by the motion, it’s bad for them. Because if we show that the government, in the cases that these policies are good for them, would still opt for them voluntarily, we don't need the motion.
Cool, what are the harms of these policies in some cases?
a) We think increased interest rates are very bad for business. This part OG already said. What did they not already say? We think that uniquely:
Unemployment, which is something that comes as a result of the lack of businesses (because it’s harder to start a business when you need to take loans that are much more expensive when you increase interest rates), is going to be more harmful to these countries than the direct harms of inflation.
Reason being: Inflation just means prices are higher, but to an extent, salaries are also higher—not to the same extent sometimes. The difference being: unemployment means zero salaries, and inflation would still happen, even if just a bit less, meaning the impact on people is worse.
b) Secondly, long-term versus short-term. Inflation is a short-term crisis that will eventually end when shortages resolve—say, when the war in Ukraine ends and we all have fuel again—as opposed to ruining the business structure in these countries, which means long-term implications. Because people lose jobs, and then we need to retrain them after a year out of the market when you don’t have businesses in the first place, etc.
c) Thirdly, we think that some of them can actually use the current timing to use a comparative advantage. Because very uniquely, if developing countries don’t increase interest rates or lower their currency level when other countries increase interest rates, it means that businesses have an increased incentive to move and shift into developing countries from the developed world, because this is a much friendlier business environment. And this is a little advantage that they are losing.
Secondly, obviously, during a crisis of shortage of energy and food, subsidizing energy and food is uniquely important. It's approximated that about 30 million people in Africa are on the verge of famine right now because of a lack of important grain imports from Ukraine and other sources. This is something that can uniquely be solved only when governments make decisions.
Why do governments make good decisions on our side?
a) Importantly, on both sides, when they take IMF loans, the IMF can advise them. They have all of the expertise. OO analyzes, “Ahh, they went to business schools and learned everything,” because everyone doesn’t have to force them—just sell them what they should do if the problem is information.
b) Secondly, because anti-corruption measures exist anyway, it means that governments will have to be transparent on both sides and justify to voters why they accept or don’t accept IMF proposals. The IMF would post what they propose, it will be on the news, people will ask politicians, “Why did you not accept it?” and they will have to justify in this particular case.
c) Thirdly, central banks do exist in many developing countries, and you know what else? The IMF, anyway, on both sides of the debate, demands increased independence for central banks. This is not a unique policy in the infoslide—this exists any day.
Opening: “The UK voted out Truss because the IMF criticizing Truss’s plans sent UK markets into—”
Three, four—thank you.
Thank you, thank you, I’ll just get into that. You know the funny thing? The IMF would criticize the political leaders for this on both sides of the debate and literally just explain that information is not an issue. You can advise them anyway, and you have to be transparent.
Central banks also exist. Independent central banks would be demanded anyway. Further, we think that:
a) It is in the direct interest of these governments to have a successful and economically flourishing population—not just a population that would immediately vote for them, for several reasons.
To increase their relative power in the global arena. They want to attract businesses, they want to have economic growth, and this is something that gives them more power because, later today, like, patterns that they can also be their elite friends, and so on. So they do want people to overall be happy.
Secondly, because they want, in the long run, to prevent unrest. It’s not enough that people just immediately vote for you if they are going to end up in mass protests, like happened several times in Venezuela, because people were very unhappy with starving. This is something bad and uncomfortable for politicians—they need to send monetary aid, and it is very bad for their functionality.
Thus, they again have an interest in good economic policies. They will listen to the IMF when it’s good for them, but in the cases that it isn’t, we shouldn’t force them.
We beg you to propose.
CO
Ellie Stephenson | MO
Youtube Link (Timestamped): HERE
I want to make one observation inside this speech: that the opening government themselves provide the logic to explain why the IMF does not do these loans and these conditions in these deeply uncharitable ways that they describe—that is to say, prevent countries from doing literally any pandemic relief. Because, as they know, it is in conflict with other blocs in China like ASEAN, etc.
I think what that means is that the government has to defend, as closing government correctly observes, these specific policies indicated in the motion, which means that you're likely to get rid of policies specifically disliked by economists—things like immensely costly and inefficient fuel subsidies—rather than abandoning literally all pandemic relief.
What I am therefore going to prove for the rest of this speech is just to explain why these specific policies, as specified in the motion, respond poorly to the specific context for COVID-19, noting also that the comparative in this debate is the removal of all conditions, something which I think closing government is insufficiently engaging with.
All right, firstly then, why these policies deal with the COVID crisis—or rather, why these countries deal with the covid crisis poorly in the status quo.
I want to note from the outset at this point that this explains, I think, better than what opposition does, why these states make mistakes. Because I think it's pretty fair for closing government to be like, "Oh, why don't states make correct decisions about our own economies?" But I think this material explains why what appears to be a great short-term decision ends up prolonging inflationary crises.
Firstly, what is the nature of the crisis that these states are facing? I would just note that it is extremely inflationary—like, empirically true. And that's for a couple of reasons.
Firstly, it's because of an initial supply shock. But importantly, it is not transitory—even the Fed has admitted that. Because following that, there are two dynamics that prolong inflation:
Inflationary policies from governments who overreact to the initial supply shock, flood the economy with money, but then achieve less productivity.
Reduced trade volumes during COVID, which means that there is less productivity to chase with all that new money.
I think that this responds somewhat towards closing government, who I think rely a little bit too much on inflation being transitory. You can't just wait it out—it's still going.
So I think that that suggests they need to engage with the specific context that we're engaged in. I also note, I suppose, that this debate isn't just about one country—there are a lot of countries that face inflationary crises. That means you get things like a race to the bottom. If they're controlling interest rates in order to attract corporations, you don't successfully attract companies to come do business in your country—you just have low, inefficient deflation.
The second thing to say, then, is how these kinds of policies—like fuel subsidies, like trying to artificially lower your exchange interest rate—affect these specific countries.
I think you likely get into inflationary spirals. And that's to say that things like subsidies, which I would like to note are huge—countries like Mexico have spent literally 1% of their GDP on fuel subsidies over the last two years—become decreasingly affordable over time. As your economy gets worse, you are less able to continue to prop up those industries.
What eventually has to happen then is that you take those subsidies off and go into a massive supply shock that people are unable to adjust for. I think that is probably pretty terrible.
Additionally, you become decreasingly productive as the value of your currency goes down and becomes less appealing to investors. There is less development occurring in your country, which means there is less productivity for all this money floating around to chase.
Additionally, you become decreasingly able to pay back loans:
Firstly, because loans are often denominated in USD, and the U.S. interest rate empirically has gone up hugely.
Secondly, because given that your productivity falls, your currency becomes worth less, meaning you now have to pay more back on your American loans. But also, it’s more expensive for you to do so in your own currency.
That, I think, means that you are a decreasingly trustworthy state to lend to as these crises go on. So that goes to suggest that these crises must be dealt with in the short run. It's not good enough to wait them out—they get worse over time.
The second thing to say is that the policies suggested by government are terrible in a number of ways.
Firstly, they're hugely regressive and inefficient. Inflation, for instance, is terrible for poor people in developing countries because they are usually indebted, as they have very little borrowing power, but they do have huge amounts of engagement with consumer markets. They have to buy products, and when those prices go up uncontrollably, they are the first on the chopping block. Their jobs are also the first ones on the chopping block.
Secondly, subsidies, etc., are deeply ineffective. They reward people who consume the most fuel. They're captured via windfalls by industry—fuel companies just absorb those subsidies and do not pass them on to consumers. And, as I've already explained, they're unsustainable.
All of that means that these economies become incredibly ineffective. That is terrible for four reasons:
a) Firstly, trade relationships are less reliable.
b) Secondly, it deters foreign direct investment because investors do not trust your economy.
c) Thirdly, it means you have to engage with costly currency protection that is clearly unsustainable.
d) Fourthly, it harms your democracy for the reasons opening government observes.
e) The final thing I want to note is that this is really bad for the industries that we probably like. It is the industries that create growth, that require investment, rather than primary industries that like low exchange rates, that we probably want to propagate in these countries.
I would also finally note that fuel subsidies have put Latin American countries back literally five years on climate commitments. I think this is probably pretty fucking bad for climate change as well.
All of that goes to suggest that these specific policies that were engaged with in this debate do not work and are just terrible—terrible for these countries’ economies.
Before I move on to some stuff about corporate capture, I'm going to take opening…
POI
"Reducible inflation sounds nice, but the question from OG is whether you would prefer the EU doesn't subsidize fuel at all and more people starve and freeze this winter."
Unresponsive to my intro. You can do transfers that help the worst-off people without sinking 1% of your GDP into terrible, environmentally destructive, and unsustainable subsidies. Come on.
All right, why then does this empower corporate capture in a really terrible way? The claim here is really powerful because it explains how the policies they describe are likely to be done in bad and inequitable ways. But additionally, it explains why you actually don't go back to normal after the crisis clears—because you undermine these governments in a structural sense.
Firstly, where governments have the capacity to intervene to protect particular actors—for instance, artificially suppressing exchange rates—that creates huge dividends to corruption. It gives you, as an oil company, huge benefits if you can do corporate capture, because that government is able to intervene on your behalf. You can suck up to the market, but you simply, straightforwardly cannot do this.
So this is a gov bench that structurally empowers corporate capture and worsens corruption.
The second thing to say is that, in times of crisis, governments have a seemingly rational incentive to prop up their largest industries. But note that this entrenches those industries in the very governance of their country and makes it increasingly hard to do things like roll back subsidies, even where they're incredibly unsustainable and inefficient.
Thirdly, I just want to note that the argument I've made about how this disincentivizes investment and growth worsens corporate capture. If it's the case that there is less, for instance, tech development because the currency has gone down and you're not considered a reliable country, that means your government is way more likely to prioritize industries like oil and agriculture, which can then do corporate capture and prolong the very terrible economic conditions that I've described.
At the end of the speech, I think it's very clear that closing opposition is the only team that's actually engaged with the actual context of these loans and the actual economic policies these countries have embarked on.
So, so proud to oppose.
Tamar Ben Meir
CG | GW
Youtube Link (Timestamped): HERE
Two things in this debate: can governments make good economic policy and make good decisions for themselves, and second, where we take away the competitive advantage of these developing countries that need this money the most.
First of all, I want to point out something about closing government. What closing government analyzes to you — closing opposition, okay — analyzes to you is why an economic crisis is really, really bad for poor people. Look, we genuinely agree with this take. I agree that inflation, and I agree that lack of productivity, and I agree that all of this is bad. The question is, on which side of the debate do we manage to mitigate it more?
I think that what they don't engage with is that we showed you the ways that these countries have to get out of this crisis or to mitigate it by, um, a little bit, okay — by getting people to open more businesses in their country, by getting other investors in other countries to come into this country because of the comparative advantage of lower interest rates and the fact that the currency is currently lowering. Prices are going lower as well, meaning that they have to invest less to do things in this country and to buy exports from these countries because they're buying them in the currency that's lower value.
That's exactly what these countries have — a comparative advantage and the ability to get money or to get their economy back on their feet — but they wouldn't otherwise. Even if on their side what they do is have less subsidies for oil and gas, they never show why that is enough to get them out of this economic crisis in the long run. Maybe it mitigates some of the damage that's happening right now, but we're the only team to show you an active way out.
Without analyzing this, their case just doesn't stand. And notice that I genuinely think this is new material if it comes out in whip, right? Because I have no ability to engage with the actual mechanisms for how they're going to get things different on the way out. What they can try to do is weigh like less subsidies over like more, more, uh, companies, but I think because companies and because exports give you an immediate impact on people's lives — because it gives them salaries and it gives the government more money in order to be able to do more things with immediately because of the exports and companies that are coming in — we think that the direct impact on people's lives is so much larger than maybe somewhere down the line less subsidies bringing benefits.
Let's get into it now. Why do we think that governments are able to decide what their economic policy is?
What happens on top half? Top half basically says sometimes these policies are good, sometimes these policies are bad. Opening government gives you several reasons why these policies could be good. Opening opposition gives you several reasons why these policies could be bad. What are the opposites? I don't know, okay? What opening opposition then tries to do is say that governments are not going to make these decisions because it's unpopular.
I think if I take that down, what does this do to the debate? In the cases where it's good policy, we think it's going to happen on either side of the debate. But what changes is whether they were forcing it upon countries when it's also bad. The reason they gave to this is populism and the fact that, like, it's the path of least resistance and people don't know what they're doing.
How do we answer this?
First of all, their political reasons or incentives that they give are true for a normal political situation and not for an economic crisis. We think that when there's an economic crisis, that's exactly when people want to see change. They want to understand what the government is going to do in order to fix this economic crisis right now.
We think that is the point where people do think long-term and understand long-term implications because these discussions are being had about how to leave the economic crisis. Discussions about inflation and discussions about interest rates are exactly why these kinds of things happen, so people know it more.
But also, they're more likely to listen to what the IMF is telling them to do and its advice because if they don't know, what they're going to default to is default to, uh, expertise. It's because they think it might do a better job than their government, so people are going to be supportive of what the IMF wants to do.
This means that all of the benefits on Opp side happen in the cases they want it to happen. The times it doesn't happen are when we, at the times where it would cause harm, is where it doesn't happen on our side.
Notice that all of these reasons engage significantly better than just the reason that opening government gave you, where it might be good policy and they can do it whatever they want — significantly better than what opening government did with opening opposition. So note that's it.
And also, last thing — notice the comparative on both sides is money, right? On both sides, they get money. The question is what they do with that money. On our side, we give them the ability to do what's best for their country.
So why do we take away the comparative advantage?
What does opening government tell you? Opening government tells you about — talks to you about — basic needs and the government's ability to subsidize important things for the people. OO rightfully attacks them on this and says that when there is a default, when there is an economic crisis, the government isn't able to do those things anyways.
That's why our addition is so significantly important — because we give you the comparative and explain why on our side, the steps that you can take when you don't impose that policy, and the natural processes that happen when you have a comparative advantage to other countries, allows you to get more money, allows you to do things that make the economy better at the end of the day — meaning that the government has more ability to actually do the things and give the basic needs and maybe not… and subsidize the thing that I want to subsidize on our side.
Meaning that even in economic crisis, it can do more than it would have been able to do on the other side.
Opening opposition says that what happened is that subsidies are what caused a lot of this crisis in the first place and, therefore, if you continue to subsidize, that's going to be bad. Notice that literally this is an assertion. Look at your notes — it doesn't analyze this at any point. He just says that a national champion is bad.
I don't think that's true. I think that what likely happens is that these countries are dependent on other countries in order to help pull them with their economy because they're usually exported. Because usually what they do is give cheap labor for other countries, and when other countries are less likely to consume, that means they have a less influx of money.
What we show is why even if that's true on either side, comparatively on our side, you have more consumption from other countries and more of these other countries trying to help you because you have a comparative advantage.
Now, I will take closing if you have anything.
"Uh, yeah, it's true. It's true countries just make decisions really good for them. Why has Mexico spent one percent of the GDP on inefficient petrol subsidies?"
I think that maybe in some cases they will make bad decisions, but we showed you why it's more likely that they make good choices on our side. They don't have to defend no one ever making mistakes — just show you likelihood.
That's why it's about a consumption crisis. That's why it's crucially important that we incentivize other countries and consumers from other countries to continue to consume our products. Even if it doesn't solve it entirely, it still shows a comparative advantage and why you get more money than we would otherwise.
Why is this more important than anything else in this debate?
Notice that:
a) We just think in the long run it means people get more money — both because of the things we showed you, but also because when we show you that countries are more likely to pay back their loans and more likely to show that their economy is growing as a result of this, that's when the IMF trusts more to give more countries things and has more money in the first place.
b) Also, it successfully pulls in companies or pulls in consumption that doesn't necessarily go away afterward, so then it saves more time.
Notice that this is logically prior to civil unrest, so when we show you the way to avoid civil unrest on our side, that is significantly better and shows you your ability to avoid bad alternatives like China in the long run as well and then the next economic crisis — because we showed you the only way out.
Please vote CG.
CO | OW
Sophie Shead
YouTube Link (Timestampped):HERE
Two parts to this speech. Firstly, proving why the IMF has greater incentives and capacity to impose conditions well. Secondly, why, independent of those incentives, why these specific conditions we are debating are good.
Firstly, who is the best at imposing these conditions? The first thing I am gonna do here is look at Opening Government. They say the IMF has bad incentives and the mechanisms here are: one, it's run by wealthy neoliberal economists, and economists care about getting money and they don't care about countries they're loaning to. I just want to note that basically all of Opening Government's harms of subsidies being good, austerity being bad, rely on the benevolence of the IMF. And the reason for that is because it's true that austerity is sometimes bad. It's true that subsidies are sometimes good, but obviously that’s not true all the time. Austerity can be good in times of hyperinflation. Subsidies often, as we explain to no response to Ellie (MO), support zombie industries, stifle growth, and commit cronyism. That’s bad.
The question is then: is the IMF able to impose these conditions prudently, where they are necessary? Ellie gives the reason of competition, which is conceded by Opening Government — that if China is supporting these states, clearly the IMF has incentives to make loans good. I'll give an additional four reasons.
The first is the construction of the IMF is democratic, which is to say all states have a say; it is not just majoritarianly controlled by the U.S. But secondly, other blocks exist, like ASEAN, so states can pull out of the IMF for you to know that. Fourthly — or thirdly, rather — the IMF just improves through time on the basis of things like governmental or domestic pressure, on the basis of history and data that people can learn from. Look at the way, for instance, the scheme for heavily indebted countries changed from being pretty punitive in 1996 to way, way less punitive in 2006, giving Zambia like four billion dollar bailouts on the basis of that data, on the basis of that domestic pressure. Fifthly, I just want to note that the IMF has way more capacity to collect information than other actors do. That is why the Opening Government claim absolutely falls out.
We then get the flip side of this from Closing Government. They say, well, actually here are some reasons why domestic governments are good. The first observation I want to make here is that this debate occurs for countries which make mistakes. We're not dealing with average domestic governments — we're dealing with the domestic government who's coming to the IMF because they are in an inflationary crisis.
What do they say? These are accountable... “SIT DOWN.” Oh sorry, that was so rude… I’ll take you later.
Government mismanagement and inflation. Uh, the first reason this argument falls through is that people do feel economic hardship, their rights of inflation is tangible, but they don't explain why that means people have the specific information about particular policies or government decisions that would reduce that inflation, right? I think it's more likely in the worst case that people just don't have economic answers. They turn to populism, they vilify racial minorities for being the cause of their economic grievance, or more generously people just demand hugely inflationary subsidies that have been giving them a bit of money but massively worsen inflation over time.
Secondly, often you're unable to hold non-democratic or imperfectly democratic governments into account, right? The elections don't work perfectly in many of these states. Thirdly, even in perfectly democratic states, elections occur every four years, some people are one-issue voters — it is incredibly unclear that you have that kind of power.
The second thing they claim here is that governments themselves want growth and they want to prevent unrest. The first thing they note is that short-term growth obviously can be profitable for the government in power, or getting money from cooperation, for instance, helps you — unclear that improves your economy overall. But secondly, I want to note empirically governments have been bad at doing this. Note the observation at the top of this issue, and that's not necessarily because those governors are stupid or evil — it's because managing inflation is really hard. Like, the economic decisions — they are really difficult. It's important we outsource it to the IMF, who has way better capacity, way better information.
I know that there's often short-term political pressure to do inflationary transfers in ways that are very, very bad, and you can — obviously, if you're a state, it requires this to prevent the uprising of your people, prevent unrest in other more pernicious ways. The final thing is that our extension clearly responds to this, right? When we explain corporate capture is far, far worse, and that is the reason why even if they were initially good governments, they are worsened by the existence of these kinds of subsidies that prop up these zombie industries, that allow them to capture corporations — so that absolutely falls through.
I just want to note the importance of this rebuttal. Clearly, this gets us over Opening Opposition when they say, “well our bad austerity is worth the trade-off in development.” We say you don't have to do that trade-off, right? Because the IMF imposes conditions well. Secondly, clearly rebuts Closing Government's claim, puts that issue.
The final thing Opening Government says is they’re like, well the IMF can just advise countries. Clearly a huge difference in scale. We would rather actually have good policies imposed. But secondly, if the IMF is so malevolent as their opening suggests, unclear as to why would you even want them to advise these countries if they're not taking your loans?
Second part of this speech: center specific conditions that being debated are good.
POI
Before that — yes? “Opp bench needs countries to take vastly IMF deals. If IMF conditions are so good, why do countries reject them or go to China?” Um, like I just don't think it's true that — well, sorry, the response clearly is that governments sometimes have bad incentives, so they don't always want to take the loans. We think the loans are actively good for citizens, right? Like, that's the claim we made. But also, I would just contest that countries hate the IMF as much as they’re suggesting, for all the reasons I’ve already given.
So what are the specific policies we're dealing with? We explained very clearly and with a huge amount of analytical depth at Ellie (MO) that IMF conditions give developing states a path out of the COVID crisis, which is necessarily inflationary. But their side, like, makes inflation worse, and it just has a whole other range of harms. Things like fuel subsidies massively worsening conditions for climate change — that is obviously terrible.
What responses do we get to this? Firstly, Closing Government is like, well you guys have no alternative. Firstly, even if we didn't, we're saying this makes inflation worse……. But secondly, clearly you do have other policies that exist we can support — like direct transfers to the poor, as opposed to, like, other inefficient subsidies. And I note that most economists support some degree of intervention — we think that happens on our side.
The second claim from Closing Government is like, well, here’s the reasons why the specific policies are good for developing states. They're like, firstly, increased interest rates harm businesses. I assume that's bad. I would note firstly that if inflation exists on either side — and yes, increase in interest rates to some degree is inevitable — but more importantly, this is not true. Businesses are more scared of rising inflation than they are of rising interest rates because increased interest rates necessarily, uh, oh sorry, only affect borrowing. But investors, if they don't believe that their money is going to be worth anything, aren’t going to invest at all — which is why that's comparatively the greater harm.
The second claim is like, well, inflation is short-term, so you shouldn't restructure businesses. Clearly, we explained this is a long-term issue and you should not have the kind of economic structure that makes you vulnerable to inflation in the first place.
Final thing is like, your food subsidies are good. I don't think this is specified by the infoslide. And clearly, if people need money for food, right, we think those are the kind of humanitarian measures that the IMF is not going to stop countries from getting to.
So this is incredibly important, right? We think that we explain that regardless of the incentives, these policies are good. And finally, we explain and get no responses to why this makes corporate capture worse. I note that that is prior to the clash about bad incentives, right, where we explain that even good governments are massively vulnerable to TNCs.
And the final thing we are really clear about is the claim from OG — that states would hate these conditions and then they go to China, and that's bad. Firstly, that suggests there is competition with the IMF, which undermines their first method. And secondly, it relies on people hating these conditions, where we explain why not. And third, it just assumes a tipping point…….. And fourth, they are certain about proving why China is bad. I think the OBRI is good in many ways.
Clear CO win