Why the World Bank and IMF Must Go!

Share on facebook
Share on twitter
Share on email

By LEO SCHWARTZ

During the protests in Washington, World Bank and International Monetary Fund (IMF) spokespersons put a happy face on their brutal policies. But an objective look at these institutions shows they are morally bankrupt.

When conceived at an economic summit in 1944 between England and the United States at Bretton Woods in New Hampshire, these leading capitalist countries had the sole goal of containing revolution and decolonization movements by subsidizing and stabilizing capitalist governments throughout the world. Lifting people out of poverty was never the real objective.

Dominated by U.S. corporate representatives, the World Bank and its enforcement arm, the IMF, dictate neoliberal “free market” values to the Third World. However, despite the popularity of “free trade” amongst U.S. capitalists, countries such as Japan, China, and South Korea achieved their high growth rates by heavily state-directed economies-not the “free market.”

The World Bank plan includes these basic elements:

· Selling off state enterprises, often to private foreign companies.

· Dropping trade barriers to the benefit of multi-national corporations.

· Devaluing local currencies to be more competitive on the world market.

· Special incentive giveaways to foreign investors.

· Destroying small-scale farming for local consumption to make way for large-scale agribusiness exporting.

· Reducing budget deficits by slashing state funding for services beneficial to working people, such as health care and education.

These policies, often referred to as “structural adjustment,” have greatly increased, not decreased, hunger and inequality worldwide. They have meant wage cuts and union busting. Structural adjustment policies have encouraged brutal, militarized states to keep a lid on protest.

The Bank’s policies have also tightened the West’s grip on the domestic and foreign policies of neocolonial and underdeveloped countries.

Martin Khor, director of the Third World Network in Malaysia, says: “Structural adjustment is a policy to continue colonial trade and economic patterns developed during the colonial period. Economically speaking, we [underdeveloped countries] are more dependent on ex-colonial countries than we ever were.”

The Bank’s own 1992 annual report showed that nations borrowing money from the World Bank have actually paid $198 million more to the economies of rich nations for goods and services on outstanding World Bank loans then the amount they had received from the Bank.

The World Bank is not the solution to world poverty but part of the problem. Citing Africa as an example, a book titled “The Case Against the World Bank and the IMF” published in 1994 by the 50 Years is Enough organization, points out that 30 of the 47 sub-Saharan states implemented the World Bank/IMF plan. Result? As early as 1988 the United Nations concluded: “The most vulnerable population groups, in particular women, youth, the disabled, and the aged, have been severely and adversely affected.”

The World Bank/IMF claimed its policies would reduce government debt. But, by 1992, Africa’s external debt reached $290 billion, about 2.5 times greater than it was in 1980.

The World Bank/IMF must go and be replaced by a humane socialist system!

Socialist Action News

Related Articles

Pandemic Capitalism’s Cruel Absurdity

By MARK T. HARRIS
The United States has the highest number of Covid-19 cases and deaths in the world. Capitalism’s inexorable drive for profits over human needs got us here.

Killer Capitalism Says “Back to Work!” in a Pandemic

By JEFF MACKLER and JAMES FORTIN
The daily number new cases of COVID-19 in the U.S. is still 22,000–25,000 and deaths are expected to rise to 3,000 a day by June 1. Yet every state is sending workers back to work. Why is this, and what really should be done?