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Pacifist demonstrations in Algeria and Sudan Pacifist demonstrations in Algeria and Sudan
by Joseph Gatt
2019-05-16 08:18:20
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The IMF and other creditors no longer loan money if they're not sure to get it back. Creditor institutions have a long history of loaning money to countries whose shaky governments ended up embezzling the loaned money, perpetuating a vicious cycle of loans and embezzlement.

yem01_400So Algeria and Sudan, whose political class over the last thirty years helped themselves when it came to state funds, are cash-stripped. Sudan desperately needs loans or faces massive famines, while Algeria, a debt-free country, will need loans to continue development projects and maintain imported goods that the nation survives with.

Both Sudan and Algeria use subsidized goods to calm their populations. In Sudan milk and bread are subsidized, while food is sold at a loss. Same goes for Algeria, where everything from milk to bread to sugar to cooking oil to eggs, fruits and vegetables are subsidized.

Furthermore, neither Sudan nor Algeria produce wheat, oil, eggs or milk in large quantities, meaning they often have to import such products. Water is the key ingredient that lacks, as most agricultural produce need large quantities of water in one form or the other.

In both Sudan and Algeria development projects were over-charged, with projects such as roads, buildings, dams or bridges being sometimes charged three times the price of the actual cost or more, with cronies of government officials often in charge of leading the projects, and government officials and crony businessmen splitting the profits.

Now that both countries have run out of cash, both countries will need loans to keep oil wells and refineries running, along with construction projects running, and the little agriculture available running.

And creditors no longer just dish out loans, but creditors want some form of good governance in the countries they will be loaning money to.

So first thing Algeria and Sudan did was to get rid of their presidents. Second thing they did was bring the population out for very peaceful demonstrations, as peaceful demonstrations are a sign of democratic maturity. Violence in the demonstrations was never covered in the media, and demonstrators were forced to remain peaceful. Third thing both governments did was “arrest” crony businessmen who had made money, often illegally, in government projects.

Such crony businessmen often did not need to apply for projects, often did do a very good job in the construction projects, and often overcharged for the projects. Now both governments are trying to show creditors that they will no longer tolerate the excesses of business cronies, and are arresting them or putting them on a wanted list.

So what will happen in Algeria and Sudan? Perhaps democratic elections will be held, where social-democratic parties will probably run for office on social-democratic platforms. The media will be allowed a certain degree of autonomy, and a credible president will be elected, one who creditors can trust when dishing out loans to both countries.

Once elected, the president in both countries will have the task of convincing creditors to give them loans, and will have to promise creditors that the loans will be put to good use. So the question the creditors will have to ask themselves is: can we trust them? Once a cheater always a cheater? Will Sudan and Algeria go back to the habits of embezzling loans for their own benefits? Will both countries act like embezzling loans is a completely acceptable form of behavior? Right now the elite is acting like it has good intentions in Algeria and Sudan. But there are dark forces in both governments who can't stop themselves from putting money in their pockets when they see it.

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