Tuesday, February 25, 2003

Karen Shepherd's presentation at United Nations Association of Utah was quite informative. She spoke mainly about her experience with the European Bank for Reconstruction and Development. The EBRD was established specifically to help the former east block countries develop market economies. Karen Shepherd had positive things to say about microloans made in these nations and that the microloans had a less than 1 percent default.

Personally, I think lending to the people in a nation is far more effective than lending to the government. I would think the most positive step that the world community could make would be for the World Bank to stop making loans to governments, and start loaning to small businesses.

Apparently, one of the greatest challenges in the former Soviet Union was that the bankers did not understand basic sound banking principals, and people faltered with the lack of adequate regulations. Gosh, could this be what is holding the Internet back from truly creating wealth.

She noted that economic reforms actually did better in chaotic places like Poland that had frequent changes in government than economies with totalitarian regimes, and hinted strongly that the economic malaise in Utah might have something to do with its single party politics.

It is very interesting, it appears that the Democrats are gradually turning into the party of sound fiscal policy while the Republicans are becoming the party of unsupportable economic fantasies.

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