DID THE IMF COMMIT FRAUD AGAINST THE SIERRA LEONE GOVERNMENT IN 1979 (PART 1)
[Originally posted on the pioneering SALONEDiscussion forum on September 3, 2014. Re-posted on the Sierra Leone Discussions Facebook page earlier today.]
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Sep 3, 2014
Counsellor [Redacted],
I respectfully submit that all five elements required to establish fraud against the IMF are present in the case of the 1979 devaluation instigated by the IMF in Sierra Leone, viz.
In order to prove that the IMF committed fraud, the government of SL must show that:
1. The IMF made a false statement of a material fact
The evidence is that the IMF falsely claimed that devaluation was a valid prescription to address SL's balance of payments deficit.
2. The IMF knew that the statement was untrue.
The evidence that devaluation is not an appropriate for addressing SL's balance of payment's problem is readily evident even to a second year student of economics. The IMF is staffed by many graduate economists. Therefore, the IMF's staff of economists knew, or reasonably should have known, what a second year economics student should know. Therefore, it is a valid inference that the IMF knew that its prescription that devaluation would work to cure SL's balance of payments deficit was false. Cf. “Why The IMF and World Bank Are Dangerous to Sierra Leone”
http://www.thepatrioticvanguard.com/why-the-imf-and-world-bank-are-dangerous-to-sierra-leone
3. The IMF intended to deceive the SL government and the people of SL
The evidence of the IMF's intent to deceive the government of SL can be inferred from its concealment of its crucial knowledge that devaluation was not an appropriate policy for addressing a balance of payments deficit in an economy such as Sierra Leone's.
This is because it is a well-established fact that devaluation -- a potent cure in western economies for a balance of trade imbalance (the situation wherein a country spends more money on its imports than it receives from its exports) -- would be a disaster in SL because none of the three conditions required for a devaluation to successfully cure a balance of trade deficit existed in SL's economy.
Cf. "Chapter 3 Why Devaluation Would Not Work in Sierra Leone" in " An analysis of the DFID/EC Strategy for Sierra Leone" http://www.thepatrioticvanguard.com/an-analysis-of-the-dfid-ec-strategy-for-sierra-leone
4. The SL government justifiably relied on the IMF's statement that devaluation is an appropriate prescription for SL's balance of payments deficit
The evidence of the SL's justifiable reliance on the IMF is evident in the fact that the SL government relied on the representations of the IMF regarding its competence in the field of economic policy, and the government did implement the IMF's prescription by devaluing the SL currency, the Leone.
5. SL suffered injury as a result of relying on the advice of the IMF and implementing its policy prescription to devalue the Leone
The evidence of injury to SL caused by the IMF-instigated devaluation is there for all to see: the devaluation unleashed a continuing vicious cycle of poverty -- massive inflation leading to unaffordable goods and services, which lead to low demand for those items that in turn leads to their reduced production, and unemployment for workers who produced thee items.
That in turn leads to lower incomes for those workers which then leads to lower demand by the workers for goods and services. That, in turn, leads to still lower production of those goods and resultant lower employment for the workers who produced them. And so the cycle of poverty endlessly repeats, with each iteration leaving in its wake poorer and poorer citizens of SL with commensurately massively lowered standards of living.
Therefore, as I mentioned in one of my responses to our friend, Kevin Kingsley-Williams, yesterday, there is a good case for charging the IMF with fraud for its 1979 devaluation prescription to the SL government.
It is thus now up to the SL government to retain competent counsel in order to file suit against the IMF for damages resulting from its fraudulent actions in SL in 1979.
Sincerely,
Moh'm Jalloh
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