The IMF: Being Saved or Drowning?
In a supreme attempt to save an organization discredited by the imposition of economic policies to the detriment of the great majority of people, the last meeting of the G-20 —controlled by the most powerful nations in the world, headed by the United States— tried to buoy the International Monetary Fund (IMF).
At a time in which the economic-financial crisis of capitalism begins one of the most difficult chapters in its history, the western powers, along with some so-called emerging countries, assembled in Washington. They were trying to save free trade, private property, recover the dollar as the international currency, protect neoliberal policies now proven unsuccessful and, especially, to salvage the form of financial control that they have exercised over poor nations of the planet through the IMF and the World Bank ever since these institutions were founded in 1944 at Bretton Woods.
It was contradictory that in the final declaration of the Summit of the G-20 called for the reform of certain capitalists positions of the IMF so that it could “gain experience from the current financial crisis”— which, paradoxically, that organization helped to foment.
IMF General Director Dominique Strauss-Kahn stated that to provide countries with loans in this period of crisis, the organization urgently needs new monetary contributions.
Great Britain, the United States and Japan hoped several emerging economies would announce loans to that organization that requested an additional $100 billion, a figure similar to what Tokyo pledged; but no one else raised their voice.
The IMF did not play any role in containing the mortgage-backed securities crisis in the United States, nor was it able to give a warning before the tremendously destructive situation approached.
That institution forces developing countries to apply economic measures that have always benefitted the wealthy layers of society and large companies. The nations that refused to comply with their directives were put at arm’s length or ignored in the awarding of credit, while assistance and support was given to dictatorial and corrupt regimes like those of Augusto Pinochet in Chile, Mobutu Sese Seko in the former Zaire, and others.
At the beginning of 1980s, when the foreign debt crisis exploded, the financial organization forced its debtors to carry out deep adjustments to their social programs, open their doors to transnational corporations, and facilitate privatization to the detriment of public industries and services. This all led to looting by the wealthy, the deepening of mass poverty, and greater social inequality in those nations.
Since the founding of the World Bank (WB) and the IMF, the United States and Europe have maintained a pact to control it. In that way, they dictate the executive leadership of both WB and the IMF, without allowing the same opportunities to any Third World country to hold those positions.
As those organizations claim the right to total legal immunity, nor can reforms be made without the approval of Washington and the other rich countries, which hold the vast majority of votes by virtue of being the major creditors. Small European countries like Switzerland or Belgium have more votes than India, Brazil or Mexico, because power is a function of the money that each country contributes to the institutions.
For that reason, the calls made by the powerful nations to carry out changes in a “Bretton Woods II” meeting of the G-20 have sounded so hollow. Many countries of the South have seen through the arbitrariness of the economic and social policies ordered by those entities and have distanced themselves—countries such as Brazil, Venezuela, Malaysia... Such nations have they even paid off their debts early in order to free themselves from the institutional dictates.
This has put the IMF in a situation in which it is unable to cover its operating expenses, and even its existence is now threatened. This is why it sees the need to for a makeover—to re-powder its nose and apply a different shade of rouge; that is to say, not to improve the situation of world hunger and poverty, but to adopt a new look for its survival.
Added to this is the realization by governments of the South that the call to create new economic-financial alliances that work in favor of the great majorities will ultimately facilitate the development of their peoples.
In this context, initiatives like the Bolivarian Alternative for the Peoples of the Americas (ALBA) and the Bank of the South are calls to expand Third World reach and to consolidate the perspective toward more integration.
Around the world, there are emerging countries with strong economies that also realize the harm caused by IMF policies applied over the past few decades. They see —more than reforming such institutions— the need to eliminate them.
This is what the IMF faces today, and for that reason the rich nations are trying by all possible means to save it to maintain their privileges and control over the poor. But like the old proverb says, there is no evil or body that can last a hundred years. (Excerpts)
