IMF-World Bank Structural Adjustment Programs (SAPs) ruined countries – fate of Sri Lanka?
Latin American socially oriented governments have rejected IMF’s neo-liberal policies after realizing that neither IMF nor World Bank have any solutions or wish to give any solutions to raise developing nations from their poverty. Have the World Bank or IMF raised a single developing nation to a developed level to date through their policies and formulas? NO, not from Structural Adjustments or new nomenclature of Poverty Reduction Growth Facility (PRGP). All preconditions for loans and debt relief have been to benefit only the rich shareholders that they represent and who elect officials to office. World Bank’s president is always an American, IMF director is always a European. If World Bank and IMF says it can reduce poverty but they have not why have developing nations continue to be slaves to these rich nations destroying their own crops for local consumption to grow items that the West wants to eat and thus contributing inadvertently to poverty of their own people?
IMF – World Bank with their corporate elite backing naturally enjoys using media to their advantage so countries never really are informed by the media the catastrophic results of the decisions that IMF-World Bank officials force countries to take because developing countries cannot survive or run without loans. There is little point blaming the leaders – even if one changes and another is replaced they all find themselves in the same soup unable to get out of the trap until and unless the developing nations unite to create their own terms. The West has mastered the art of keeping the developing nations divided by allowing for the weaknesses in excesses of politicians of the Third World whom the First World sees as the wagons to securing their own benefits. Puppet regimes are created because of the weaknesses of the third world leaders and not because of any ingenuity of the First World. They have only mastered the art of providing the incentives to increase corruption so long as it benefits them.
IMF & World Bank
Created in : 1944 at Bretton Woods Conference, New Hampshire.
Based in: Washington DC
Original intention: Promote international economic cooperation and provide member countries short-term loans so they could trade with each other.
Current role : ‘bailing’ out countries caused by currency speculation in global casino economy and giving loan packages tied to conditions known as structural adjustment programs (SAPs). IMF is like a loan shark because for getting loans countries have to follow IMF policies even for debt relief. IMF will decide how much a debt country can spend on education, health, environmental protection etc.
World Bank/IMF – Objectives of Structural Adjustments
- ‘Liberalization’ of the economy means cutting welfare to the people and enabling resource extraction/export-oriented open markets
- Subtle way to reduce the role of the State in governance when globalists end up controlling how a country is run. Bribing politicians delays the realization of the ultimate aim knowing that majority of politicians are motivated by monetary gains for themselves and do not care what may happen to the State or the people. They think the money given to them by the globalists and stored in Swiss bank accounts would enable them to flee or seek refuge elsewhere when the country begins to fall apart.
- Everything is privatized. Domestic industries are killed off or made impossible to run.
- Currency is devalued, interest rates are increased, labor market is made ‘flexible’ creating an influx of foreigners into a nation and worsening the unemployment of rate of locals. Elimination of subsidies such as food etc.
- Regulations, laws, standards are all adjusted to enable foreign investors to take over every area that locals held control of. Locals in top positions fall prey to the buy over bargains little realizing that once handed over these profit running entities become foreign owned and run according to their laws.
Once the above is achieved, it means the following for the people of a nation
- Poor countries will have to export to raise money to pay off debts. IMF and World Bank are quick to entice countries into the global market place before they are economically and socially stable and ready. These countries are told to concentrate on cash crops. Resources from poorer regions become even cheaper favouring Western consumers.
- Governments have to increase exports to keep currencies stable and earn foreign exchange to help pay off debts.
- Governments have to spend less, reduce consumption, decrease financial regulations etc this leads to decrease in value of labor, capital flows volatile, countries are asked to peg their currencies to the dollar to keep exchange rate stable and social unrest results then investors pull out their assets/interests and an economic collapse occurs.
- IMF donors keep exchange rates in their favour which means that poor nations remain poor or may become poorer.
World Bank/IMF – The path to destroying a country
Step 1: Sell off local banks to foreign banks
Step 2: Open capital markets – create market based pricing ending up with bills that no one can pay.
Step 3: Open up borders to trade – free marketeering. Coercion trade. This is to enable globalists to fully control all industry in a country. China has a 40% tariff on US and US has a 2% on China – globalists control China. Walmart does not sell anything American. Walmart has over 700 plants in China. IMF/World Bank wants to destroy economies so it cannot produce anything and open borders to sell their own goods. The abolition of all protective trade barriers and the orientation of economies to exports thwarts efforts of Third World nations to escape from their
dependence on the industrialized nations and to become economically self-sufficient.
Step 4: Install puppet corporate governments. When IMF or World Bank says they would support a transition government they actually mean they will fund a coup d’etat. Hugo Chavez told the IMF to go packing. Chavez declared he would double the taxes on oil corporations which will give money for Venzuela’s social programs – IMF/World Bank wanted him removed. At the suggestion of the IMF and World Bank, ousted Egyptian President Hosni Mubarak sold public companies to local and foreign investors, while 40 per cent of Egyptians earned US$2 per day.
How many countries fell victim?
Examples of privatization
- Argentina – IMF and World Bank asked Argentina to sell off their assets and privatizing all public assets. The people are taxed thereafter. Argentina’s water system was sold for a song to Enron. Argentina does not have clean drinking water still! The pipeline running through Argentina and Chile was sold to Enron as well. Enron assets were transferred to a dummy company and Enron was declared bankrupt. The politicians are bribed to privatize anything and everything and to transfer to World Bank or IMF who in turn hand over to their cronies. Citibank grabbed half of Argentina’s banks. Politicians became rich with accounts in Swiss banks.
Examples of creating riots
- IMF and World Bank also help create riots. When a riot takes place the capital runs away from the country enabling IMF to add more conditions and further strangulate a country
Examples of creating tensions inside countries:
The example of Argentina with high unemployment did not stop IMF from insisting that Argentina cut off unemployment benefits, take away pension funds, cut education budgets. IMF was creating a recession another tactic to demolish a nation.
Examples of disasters created by IMF/World Bank
Somalia suffers from an inflicted civil war enabling humanitarian intervention and the positioning of 4 US oil giants US oil giants Conoco, Amoco, Chevron and Phillips in a country that was self-sufficient in food in the 1970s despite droughts. Drought was used as excuse to give IMF/World Bank food ‘aid’ while destroying the nomadic and commercial livestock but increasing European beef imports to West Africa (low quality beef sold at half price of locally produced meat) and farmers find no one is willing to buy their herds. Droughts occur due to oversupply of grain staples under supervision of World Bank and these are systematically destroying the national food agriculture.
IMF/World Bank – Guilt List
- Both funded with taxpayer money but operates in secrecy. Members of affected communities are not considered to design loan packages. IMF works with central banks and finance ministers to make policies and both entities refuse to allow public scrutiny and independent evaluation of their policy systems.
- Both guilty of dominating decision making – voting powers determined by amount of money each country pays to IMF’s quota system (one dollar – one vote = more dollars –more votes!) Disproportionate power given to wealthy countries means they push the interests of their banks, their investors, their corporations and not the needs of the world’s poor.
- Both guilty of creating inequality and environmental destruction
- Both demand countries cut spending on education and health, basic food and transportation subsidies, devaluation of national currencies to make exports cheaper, privatization of national assets, freezing of wages to repay debt given
- Both help create increase in poverty and reduce a country’s ability to build itself and allows multinational corporations to exploit workers and environment (is this the ultimate goal of the IMF and World Bank?) ex: IMF loan package to Argentina was tied to cuts in doctors/teachers salaries and decrease in social security payments (the public knows of these only after the deals are signed)
- Both help create ‘elites’ in developing nations who are willing and subservient to First World elites because they serve to personally and commercially gain.
- Both guilty of forcing developing nations to prioritize export production over development of diversified economies. 80% of malnourished children are from countries that were forced to shift from food production for local consumption to production of export crops destined for West.
- Both guilty of eliminating assistance to domestic industries but providing benefits to MNCs ex: insisting on lowering labor costs advantageous to MNCs. Workers in free trade zones earn pittance, live in deplorable conditions and in perpetual poverty.
- Both guilty of forcing countries to give tax breaks and subsidies to export industries. Public assets like forestland, utilities such as phone, water, electricity are sold off to foreign investors at rock bottom prices. Ex: IMF forced Haiti to open market to imported, highly subsidized US rice while prohibiting Haiti from subsidizing its own farmers. US corporation Early Rice sells 50% of rice consumed by Haiti.
- Both guilty of advising countries to attract foreign investors by weakening their labor laws, eliminating collective bargaining laws and suppressing wages. Ex: IMF allows corporations to fire at whim and calls it ‘labor flexibility’. Haiti was told to remove statute that mandated increases in minimum wage. Even the US ordinary citizens are affected by IMF/World beause because they cant compete with cheap exploited foreign labor. IMF has caused 200m ‘newly poor’ from South Korea, Thailand, Indonesia and other countries in the Asian world. IMF response was ‘lay off’.
- Both guilty of making life harder for women in developing economies as the imposition on public utilities affect them – girls end up leaving school without continuing studies and end up in work environments that they should not belong to.
- Both are guilty of not considering the impact on environment in making policy proposals. Insistence on cocoa exports by Ivory Coast has resulted in 2/3 of the country’s forests been ruined.
- Both guilty of favouring the rich – bailing out rich bankers. Pushing countries to deregulate financial systems, removing regulations to draw foreign investors has caused chaos because capital invested as short-term puts countries at the whim of financial speculators. Mexico peso crisis in 1995 resulted in IMF and US entering to prop up interest and exchange rates, bailing out Wall Street Bankers with tax payers money. During the bailout of Asian countries IMF insisted that governments assume the bad debts of private banks forcing the public to pay the costs thus taking away resources for social programs.
The World Bank & IMF are owned and controlled by N M Rothschild and 30-40 of the wealthiest people in the world.
- If the world’s central banks are under the control of 4 banks – Bank of America, JP Morgan Chase, Citigroup and Wells Fargo and these in turn own the world’s 4 largest oil companies Exxon Mobil, Royal Dutch/Shell, BP and Chevron Texaco alongside Deutsch Bank, BNP, Barclays and European elites and these 4 banks are the top 10 stock holders of virtually every Fortune 500 companies what if the stockholders of these banks are the same?
- What if the 43,060 transnational corporations are controlled by 1318 companies and the same handful of people giving them disproportionate power over the global economy?
- What if these 1318 companies collectively own through their shares the world’s largest blue chip and manufacturing firms?
- What if these 1318 companies broken down further led to 147 companies who between them held 40% of the total wealth of the world?
If the World Bank and IMF requires nations to sign secret agreements agreeing to sell off assets like water, electricity, gas etc and those signing on behalf of nations are agreeing to take economic steps that would devastate nations – what would it mean to these nations?
If the World Bank and IMF have an arrangement with politicians of nations and agree to pay billions of dollars to Swiss Bank accounts so that they would agree to transfer a countries fixed assets – what would it mean to these nations?
What would happen if the governments or rather the politicians who do not agree are cut-off from international borrowing as punishment or plan for the overthrow of government?
No government can last when its populations are declining into poverty, it is when that looks to be happening that they reach out for the hand of their saviors who are invariably the very people that caused the fall – Somalia is an example that developing nations should keep in mind. So long as the oil can be tapped even if the people die of starvation the elites and MNCs careless.
Third World politicians need to return to fundamentals and realize that food for local consumption must come first, water is a no- bargain utility, labor is an asset of the country not an asset to be flogged…we hardly see any political parties come out with solid development formulas for the country instead of political slogans that are advantageous to bring them into power only.
People of Sri Lanka and politicians in particular must not fall prey to the carrots of dollars hung before them as loans. If taken they must ensure that despite the conditions they adopt other ways to ensure the self-sufficiency for the people is not compromised at all.
– by Shenali D Waduge
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