Letter from IMF Chief to Bahrain Crown Prince: Stop McKinseys
2019-02-19 - 4:51 am
Bahrain Mirror (Exclusive): An indirect message was addressed to Bahrain's Crown Prince Salman bin Hamad Al Khalifa and his economic team. It neither came from a theocrat nor a socialist, but from the head of the International Monetary Fund Christine Lagarde: Stop using global consultancy firms.
Yes, stop relying on "the McKinseys and Boston Consulting Groups" specifically. She highlighted that spending on these consultants is "inefficient". These clear statements were made by the former French government minister in the presence of representatives from the two firms at the World Economic Forum (WEF) in Davos, Switzerland.
"I'm looking around to see whether there are any of the McKinseys and Boston Consulting Groups, and if there are please listen to me," she stressed, saying: "I see many, many low-income countries and emerging-market economies spend millions of dollars commissioning consultants to build their strategy plan."
She recommended some saving be made by taking the 17 principles, the actionable items, and start with that.
"From there, the consultants can actually do their job of putting it into reality. But don't reinvent it - it's right there. So much is wasted. That's part of the inefficient spending that can actually be saved," Lagarde added.
The chief of the fund, which has a tarnished reputation in many parts of the world for its heavy-handed promotion of free-market reforms in indebted countries over the past few decades, is recommending that spending on firms such as McKinseys that wrote Bahrain's vision for 2030 stops.
This vision was thrown at the Bahraini economy for $14 million. Such "reinvented" strategy plans as described by the IMF chief are not worth the spending where a lot is wasted- visions whose results can be seen bouncing back the wall the country hit.
It's a message that was not specifically directed at Bahrain, but touched on the reality that the country has reached by adopting the McKinseys plan. The chief proposes that Bahrain and other debtor countries an alternative: Cut white elephant projects and corruption..
It's as if the head of the IMF is referring to the regime's huge failed projects and corruption. The government, for instance, has spent about 65 million dinars on the construction of the Bahrain Circuit, with operating losses amounting to over 130 million dinars in just 10 years. Mumtalakat considered the Circuit to be the one "depleting the most of the holding company's resources following Gulf Air."
The solution she proposed is to stop wasting on such big projects, such as dumping a Boeing 747 to build an underwater park. It is another project whose cost hasn't been announced by Bahrain, neither the category targeted by the "diving project" nor the chances of its success.
As for the corruption that Lagarde talked about, Bahrain is among the countries that suffer from it. It's corruption index is deteriorating, and the reports of the Audit Office are full of examples that reveal the extent of the corruption. However, no one hears about anyone being held accountable.
Hence, more money-wasting useless projects await us, amid rampant corruption involving senior officials in the state, who are not affected by any kind of control or accountability, all while the country sinks into a serious debt crisis.
Despite reservations about the IMF's policies that push towards putting more pressure on the poor countries, the Chief's message regarding the strategy plans put forward by the large firms is worthy of reflection.
No economy in the world should ignore the views of the inside in favor of canned external visions. The Crown Prince and other officials must immediately stop these destructive policies if they really want to improve the economy.
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