IMF not a friend to poor countries


It is no small irony that the powerful now former head of the International Monetary Fund (IMF), Dominique Strauss-Kahn, has been stopped in his tracks by charges against him by a woman from Guinea who, at the time of the ill-fated occasion in which she alleges he sexually assaulted her, worked as a maid at a posh New York hotel. The spheres of two such disparate individuals would otherwise overlap minimally, if at all.

Up until the time of his resignation stemming from the charges, Strauss-Kahn held a commanding position that affected the lives of untold millions in many developing and still to be developed nations, and of late Greece, Romania and Ukraine. And, of course, I have no doubt, this woman’s home country of Guinea.

Whatever its mandate when it was first established in 1944, the IMF has been a bane to the poor people of the countries whose governments have had little option but to take IMF loans in order to respond to balance of payment shortfalls.

Strauss-Kahn was voted into the top position in 2007 with a mandate to reform the IMF after decades of evidence that the conditions, really, the restrictions it places on borrowing countries, have been devastating for the poor people of such nations.

It has to mean something that the former Chief Economist of the World Bank (and Nobelist in Economics) Joseph Stiglitz has criticized the IMF for having lost the vision for its original mandate and instead becoming more influenced by the interests of the Western financial community. The IMF counts 187 member nations but is for the most part controlled by major Western authorities, so some would argue that it has always maintained its original mandate.

Former Jamaica Prime Minister Michael Manley, whose battle with the IMF on behalf of his country is a matter for the history books, charged that the lending institution’s structural adjustment program, a condition for receiving loans, was in effect an attack on the sovereignty of former colonial nations. He equated it to imperialism or neocolonialism.

For all that is wrong with the world at a macroeconomic level, it is easy to look to institutions like the IMF and the World Bank as perpetuators of imperialist and neocolonial attitudes and systems that create havoc with their demands that countries enact harsh economic reforms, trade liberalization, privatization of national resources and deregulation. Further, the IMF routinely counsels currency devaluation to the governments of chronically poor nations. The resulting inflation means that those who can barely afford to feed themselves and their families, purchasing the goods that are being imported into their countries under the terms of the IMF, are then pushed to starvation.

Each time the IMF enters the picture to respond to a loan request the fallout is that a borrowing nation will face damage to its systems of infrastructure, education and health care, not to mention its farming industry if there is one, and the country’s natural environment.

African and other Third World countries have incurred trillions of dollars in debts through World Bank, IMF and Western government loans. In 2006, developing countries owed $3.7-trillion (US) in loans, and were servicing more than $570-billion. In Africa, $1-trillion (US) worth of loans has provided no significant benefit to the masses. African nations collectively pay $14-billion annually to service $200-billion in old debt. This is a never-ending quagmire for a continent of nations where most people earn less than $2 (US) a day. In the past two decades, African countries have paid more money to service debt to foreign creditors than these countries have received in development assistance or in new loans.

The irony of course is that debt payments are going to countries that in effect owe Africa for all that they have taken out of the continent. Hence the current irony that it was a simple woman from Africa that brought the IMF back to public attention with a series of charges that on a larger scale are not inconsistent with the way in which exploiter nations have dealt with so-called Third World nations.

A note on Haiti and earthquake stats…

A recent report prepared for the U.S. Agency for International Development has it that the number of people who died in Haiti in the January 2010 earthquake that rocked the nation’s capital and environs was somewhere between 46,000 and 85,000 and not the over 300,000 as claimed by Haitian authorities. Regardless of the numbers, the country has suffered immensely from this devastation and is still in need of a miracle of epic proportions.

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