“The IMF, despite the pin stripes and pretension, is the “repo” man or bailiff of the international community. Borrow
too much money and the repo man will come to take back your car, flatscreen TV or your house if you cannot repay your
loans.” – Professor Roman Grynberg, Botswana Institute for Development Policy Analysis.
A few months ago, I wrote a piece here that was titled “No Smoke without a Fire”.
It wasn’t an attack on the banking fraternity as some may have thought. Instead, it was a collection of quotes of what certain prominent figures in history have said of bankers. And whether those views had relevance in today’s world, in which many countries are presently suffering from the effects of an economic crisis that has its very roots in the actions of bankers. After reading this (on IMF extended credit facility to Malawi), this morning, I decided to put things into perspective with a similar approach, using a collection of articles.
A lot has been written over the years about organisations that wear the mantle as rescuers of countries in financial turmoil. Arguably, most of that ‘fire‘ has been directed to two ‘super hero’ organisations in the name of the World Bank and the IMF.
What strikes me (besides the perfidy they have perpetrated) is that despite all the evidence, many poor countries (especially in Africa), still think they have a chance with achieving economic success by adherence to the prescriptions of these super heroes, even when there’s a significant amount of evidence suggesting its a terrible option:-
“Malawi is on her own and IMF is not going to make life easy for her country. Although that signing up to IMF austerity measures has opened up to trickling of liquidity, but the price Malawi paying is may be too high.”
IMF mission to Botswana raises eyebrows that includes:
Opposition Botswana National Front (BNF) spokesman, Moeti Mohwasa, has described the IMF as “a bourgeoisie institution which will want the government to pay low wages so that the private sector salaries are also low”, reacting to calls by the IMF for Botswana to cut her wage bill.
He argued that the IMF has the propensity to compare a State to a business, which can function well only if it is “mean and lean”. The party further argued that the urge was part of a viciously anti working class project, which goes along with privatization.
“Jobs done by workers who will be retrenched will be outsourced. As the law of demand and supply suggests, the aim is to have as many people as possible unemployed, which will ultimately lead to low workers’ salaries and exploitation.
The aim being to create space for super profits,” offered the BNF spokesman.
“…according to 50 Years Is Enough, the World Bank’s policies are “indistinguishable” from the IMF’s in that they often go to “austerity plans that ‘reform’ economic policies by suffocating the poor and inviting corporate exploitation..” (http://www.50years.org/action/april16/april16b.html)
Even internationally, there have been criticism made against organisations like the IMF:
IMF policies could strangle Jamaica’s future – report that includes:
“Pro-cyclical macroeconomic policies, implemented under the auspices of the IMF, damaged Jamaica’s recent and current economic prospects,” the report notes. It added that “this policy mix risks perpetuating an unsustainable cycle where public spending cuts lead to low growth, exacerbating the public debt burden and eventually leading to further cuts and even lower growth”.
Financial observers note that Jamaica is currently paying more debt interest than any other country, including those in Europe that have been reeling under the near collapse of the euro. In total, the island owes around US$18 billion. “
“The CEPR, a US-based economic think tank, in its report ‘Update on the Jamaican Economy’, warns that IMF-enforced policies could keep the Jamaican economy in a “debt trap” for years.…
“The IMF, World Bank, IDB (Inter-American Development Bank), and other multilateral institutions deserve a large share of the blame,” CEPR co-director Mark Weisbrot said in a statement, noting that “their contractionary policies prioritise the servicing of debt over growth and development.”
Via Business Economy IMF: The making of inequality which includes:
“But the IMF is less interested in explaining why the customs union countries got into the situation they find themselves in than in how to get out of it.”
After reading all this, it doesn’t appear like these are empty and baseless criticisms from journalists and other sorts with hidden agendas. In my view, these people do not have hidden agendas. Most of them — by virtue of their backgrounds — don’t even have a direct interest in issues in which the likes of the IMF meddle. Instead the criticsm is backed by reasons as to why they are wary of the advice the IMF is dishing. Doesn’t that give the criticism some form of legitimacy?
While Malawi’s leadership may find accepting the lifeline thrown by the IMF as an easier or less turbulent path to take, they may be doing so without asking whether there was another way, elsewhere, that at least ensured that the least disadvantaged in society did not suffer.
To me, reading all these criticisms strongly suggests that if such policies or conditions are adhered to, the poorest in society will suffer disproportionately, there will be high unemployment, and wages will come down -> EXPLOITATION.
For a ‘God fearing country’ whose leaders are often quoted referring to “God” and encouraging concern for others as being as important as concern for self, it’s simply not good enough.