Livestock projects in Botswana led to the destruction of grazing land and the death of thousands of migratory animals. This resulted in the inability of the natives to obtain food by hunting, forcing them into dependence on the government for survival.
While Nigeria and Argentina are drowning in debt, billions from the World Bank have gone into building lavish new capital cities to house government agencies and the ruling elite. In Zaire, Mexico, and the Philippines, political leaders became billionaires while receiving World Bank loans on behalf of their nations. In the Central African Republic, IMF and World Bank loans were used to stage a coronation for its emperor.
The record of corruption and waste is endless. But the real eye-opener is in the failure of socialist ventures, those magnificent projects which were to bring prosperity to the underdeveloped countries. Here are just a few examples.
CONVERTING MONEY INTO FAILURE
Before receiving loans from the World Bank, Tanzania was not wealthy, but it fed its own people, and it had economic growth-1. Graham Hancock,
NEARER TO THE HEART'S DESIRE
103
After receiving more than 3 billion dollars in loans, it nationalized the nation's farms and industries and converted every business into a government agency. It built a truck assembly plant, a tire factory, electronic factories, highways, ports, railways, and dams. Tanzania's industrial production and agricultural output fell by almost one-third. Food was the main export in 1966. Under socialism, food had to be imported—paid for by foreign aid and more loans from the World Bank. The country is hopelessly in debt with no way to repay.
Argentina once had one of the highest standards of living in Latin America. But then it became the recipient of massive loans from the World Bank as well as commercial banks in the United States. Since the money was given to politicians, it was used to build the only system politicians know how to build: socialism. By 1982, the Gross National Product was in a nose dive, manufacturing had fallen to less than half of capacity, thousands of privately owned companies had been forced into bankruptcy, unemployment was soaring, and so was welfare. By 1989, inflation was running at an average of 5,000% and, in the summer of that year, topped at 1,000,000%! Banks were offering interest rates of 600%
per month in hopes of keeping deposits from being moved out of the country. People were rioting in the streets for food, and the government was blaming greedy shop owners for raising prices.
The nation was hopelessly in debt with no way to repay.
Brazil is run by the military, and the state controls the economy.
Government-owned companies consume 65% of all industrial
investment, which means that the private sector is limited to 35%
and is shrinking. The government used loans from U.S. banks to create an oil company, Petroleo Brasileiro S.A., which became Latin America's largest corporation. Despite huge oil deposits and record-high oil prices, the company operated at a loss and was not even able to produce enough gasoline for its own citizens. By 1990, inflation was running at 5,000%. Since 1960, its prices had risen to 164,000 times their original level. A new crime was invented called hedging against inflation," and people were arrested for charging the free-market price for their goods and for using dollars or gold as money. Led by Communist organizers, mobs roamed the streets shouting "We're hungry. Steal what you will!" The nation was hopelessly in debt with no way to repay.
1
104 THE CREATURE FROM JEKYLL ISLAND
The experience in Mexico was a carbon copy of that in Brazil, except that the amount of money was larger. When the world's fourth largest oil reserves were discovered, Mexican politicians reached for the brass ring. With billions borrowed from U.S. banks, they launched Petroleos Mexicanos (PEMEX) and soon became the world's fifth largest oil producer. They also built chemical plants and railroads, and launched many other industrial projects. These were run as welfare agencies instead of businesses: too many people on the payroll, too many managers, excessive salaries, too many holidays, and unrealistic benefits. The ventures floundered and lost money. Private businesses failed by the thousands, and unemployment rose. The government increased the minimum
wage causing more businesses to fail and more unemployment.
That led to more welfare and unemployment benefits. To pay for that, the government borrowed even more and began creating its own fiat money. Inflation destroyed what was left of the economy.
