The IMF was conceived in July 1944 originally with 45 members and came into existence in December 1945 when 29 countries signed the agreement, with a goal to stabilize exchange rates and assist the reconstruction of the world’s international payment system. Countries contributed to a pool which could be borrowed from, on a temporary basis, by countries with payment imbalances. The IMF was important when it was first created because it helped the world stabilize the economic system. The IMF works to improve the economies of its member countries. The IMF describes itself as “an organization of 187 countries (as of July 2010), working to foster global monetary cooperation, secure financial stability, facilitate international trade, promote high employment and sustainable economic growth, and reduce poverty.”
In this Bruce Cockburn song from 1983, he takes issue with this benevolent description of their work:
“Sinister cynical instrument
Who makes the gun into a sacrament --
The only response to the deification
Of tyranny by so-called "developed" nations'
Idolatry of ideology
North South East West
Kill the best and buy the rest
It's just spend a buck to make a buck
You don't really give a flying fuck
About the people in misery
IMF dirty MF
Takes away everything it can get
Always making certain that there's one thing left
Keep them on the hook with insupportable debt”
"Two criticisms from economists have been that financial aid is always bound to so-called Conditionalities, including SAPs. It is claimed that conditionalities (economic performance targets established as a precondition for IMF loans) retard social stability and hence inhibit the stated goals of the IMF, while Structural Adjustment Programs lead to an increase in poverty in recipient countries.
The IMF sometimes advocates “austerity programmes,” cutting public spending and increasing taxes even when the economy is weak, in order to bring budgets closer to a balance, thus reducing budget deficits. Countries are often advised to lower their corporate tax rate. In Globalization and Its Discontents, Joseph E. Stiglitz, former chief economist and senior vice president at the World Bank, criticizes these policies. He argues that by converting to a more monetarist approach, the purpose of the fund is no longer valid, as it was designed to provide funds for countries to carry out Keynesian reflations, and that the IMF “was not participating in a conspiracy, but it was reflecting the interests and ideology of the Western financial community.”
“When the IMF arrives in a country, they are interested in only one thing. How do we make sure the banks and financial institutions are paid?... It is the IMF that keeps the [financial] speculators in business. They’re not interested in development, or what helps a country to get out of poverty.”
The Overseas Development Institute (ODI) has further explanations for their complaints, including the role of Bretton Woods institutions have played since the Cold War period, supporting military dictatorships friendly to the US and Europe and specifically anti-communist regimes. Other charges include the fund’s apathy over human and labor rights, all issues that have sparked anti-globalization protests.
You will no doubt recall John Perkins and his Confessions of an Economic Hit Man; here he is speaking at the Wealth Masters International annual meeting: He’s also weighed in on Libya, the resources and failure of Libya to play along with the corporations and banks of the IMF and World Bank, as has Russ Baker (the paragraph on ‘Wall Street in Iraq?’ is pretty funny.). Remember also that the IMF gave loans to the provisional government early on, and the west help set up a central bank for them. Egyptians, of course, were well aware that the IMF and World Bank neoliberal economics were responsible for much of their citizenry’s misery: high food prices, austerity cuts, and privatization of national infrastructure. Many outraged citizens around the globe have caught on sooner than Americans.
“History teaches that empires do not endure; they collapse or are overthrown. Wars ensue and another empire fills the vacuum. The past sends a compelling message. We must change. We cannot afford to watch history repeat itself.
Let us not allow this empire to collapse and be replaced by another. Instead, let us all vow to create a new consciousness. Let the grass-roots movements in the Middle East – fostered by the young who must live with the future and are fueled through social networks – inspire us to demand that our country, our financial institutions and the corporations that depend on us to buy their goods and services commit themselves to fashioning a world that is sustainable, just, peaceful, and prosperous for all.
We stand at the threshold. It is time for you and me to step across that threshold, to move out of the dark void of brutal exploitation and greed into the light of compassion and cooperation.”
A documentary called ‘The Four Horsemen Are Coming’ is about to be released. It is an expose explaining ‘how the world really works’; twenty-three financial experts speak out, including several of my favorite economists who were once insiders at the IMF and World Bank; Noam Chomsky also appears. The film’s website encourages citizens to demand their local theaters show it; the screenings section offers advice. It’s shiver-inducing to see all these whistleblowers in one place; the film must be astounding, and the PTB may not want us to see it. ;o)
As you read diaries and coverage of Occupy Wall Street, and tomorrow’s first day of ‘Fight the Machine’, please remember that Anonymous is now calling it: ‘Occupy the World’. The 99%-ers around the world face the same enemy: greed, control, rising food and energy prices, disappearing or non-existent social safety programs, increasing starvation, death from poisoned air, water and soil, and more, due not only to financial speculation, wealth extraction and deregulation, but also a concerted and cavalier effort to maximize profit at our expenses: (in short: fascism) We are the 99%! We are legion! ;o)
Become Dog Soldiers for a new democracy!
Occupy Wall Street, and support Stop the Machine! any way you can.
(cross-posted at www.my.firedoglake.com)