Thousands arrested in Zimbabwe for not cutting prices

http://www.cnn.com/2007/WORLD/africa/07/26/zimbabwe.arrests.ap/index.html

Thousands of store owners, managers and business executives have been arrested since the government began its campaign to slash prices last month in Zimbabwe.The government ordered that prices be slashed by around 50 percent to curb inflation, officially at 4,500 percent but estimated to be twice as high.Already scarce staple foods, gasoline and many basics have disappeared from shelves because store owners say they can't afford to sell at the new low prices.Foreign investment, loans and development aid to Zimbabwe have dried up amid years of political and economic turmoil after Mugabe's government began often-violent seizures of thousands of white-owned farms in 2000.Mugabe rejects criticism that the meltdown is the result of mismanagement and instead blames Western sanctions.

This article showed me a clear interdependent relationship between economy of developing nations and international economic institutions. It seems discouraging that international institutions and their policies are not working properly as they were intended. While the IMF's stated purpose is to create global economic and currency stability, many of its policies are highly controversial. The IMF offers bailouts to foreign countries but with what it refers to as "Structural Adjustment Policies". These policies are supposed to liberalize the market, reduce governmental spending, and increase transparency in order to attract foreign investors and prevent overspending and corruption. However, many of these policies are counterproductive. Additionally, many of the proposed bailout loans proposed by IMF's sister, the World Bank, are conveniently required to make up for the budget deficits of an overly burdened national economy. These economies are so overly burdened that they cannot make sufficient investment in necessary national infrastructures required to keep the economy going. It must be noted that the World Bank loans, like the IMF, also tout structural adjustment policies that may plung the national economy into another depression.