Typical street scene in Santa Ana, El Salvador. (Photo: iStock)
IMF Survey: Crisis Breeds 'Fear Psychosis'
February 18, 2009
Badly managed companies should be allowed to die a natural death; "survival of the fittest" should be the governing principle (photo: Newscom).
Global Economic Crisis
Dear IMF Survey:
The word "recession" has created a fear psychosis that has little basis in reality. The rumor mill is working overtime. Factories are not running to capacity and jobs are being cut everywhere, while the government is pumping funds to boost credit.
It has always been about the survival of the fittest. If companies can sustain losses for awhile or cash-rich companies are able to drastically reduce product prices without compromising quality, then demand will re-emerge automatically.
Let the badly managed companies die a natural death—or, if people are willing, let them buy up such companies at bargain prices. Trade should be free and the currency exchange control system strengthened.
This is my humble view. Governments should not just stimulate one thing. They ought to be identifying sectors where credit should flow—sectors that will foster the employment and growth needed for the overall economy to grow.
Mahendra Kumar Dash
Kolkata, India