By M.K. Styllinski
“The causes of the sustained crisis of development in the Third World are extremely complex, but it is certain that excessive reliance on export-led growth in an unstable world economy creates major structural problems that all growth strategies must avoid. But exports are at the core of the IMF philosophy, and its guidance has gravely hindered the struggle of innumerable poor nations to escape their suffering.”
– Gabriel Kolko
The World Bank, (WB) The International Monetary fund, (IMF) and The World Trade Organisation (WTO) are responsible for extending Official Culture on a macro-social scale. They are by default, a global cartel spreading a belief which has translated the true meaning of globalisation as a New International Economic order which has led to decades of social, economic and cultural decay for the world. The unofficial goals of the IMF and World Bank was to always make sure that the consolidation of riches and power would remain in Elite hands and be expanded; fully aware that World War II gave them the opportunity to do just that.
As with so many institutions hastily created during the end and just after the Second World War, The World Bank and International Monetary Fund (IMF) were founded by US and British Governments at The Bretton Woods Conference in 1944 Hampshire, USA. The official line was to develop strong economies for those European countries most affected by the carnage of the War. What it also did was to firmly establish an overriding economic belief to the exclusion of any other. Both are closely allied with Wall Street bankers and the US Treasury so that economic policies that benefit private investors and financial speculators in the free-market are guaranteed to be implemented, come what may.
The best illustration of this is the “Washington Consensus” developed by the World Bank and IMF members in the early eighties and which finalised the process of large-scale outsourcing, financial deregulation, and privatisation. This paid huge dividends for multi-national corporations, the international banking industry, Wall St., and the world’s richest family dynasties but proved to be a social, cultural and ecological disaster for both the working and middle-class in the West and the developing world. It was finally eclipsed by the rise of China but the results live on.
Both the IMF and the World Bank decisions are based on 40 percent of the votes from the G8 countries which is not what you might call “representative.” Considering its toxic effects its more than ironic that the IMF is funded with taxpayer money, yet functions in a state of secrecy and legal immunity. Extraordinarily, the World Bank and the IMF are not accountable for their actions under law. It is therefore almost impossible to dismantle this vast banking entity holding so many countries to ransom with almost breath-taking hypocrisy that it is somehow acting as global saviour. At the same time, as with the United Nations, if the US sees something that threatens its interests then it merely has to veto the proposed action by the World Bank and sit back and puff on a cigar. This extends to the design and implementation of loan packages by international bankers and finance staff without any participation from civic society or government policy and most importantly, from those it will most affect.
At 18 percent of the vote the US straddles both institutions and makes sure that the power of their veto always conforms to US and G7 interests. This means the global economy stays within the narrow confines of what is possible and not possible which is defined by the very same institutions in the first place. This in turn, ensures that poorer nations are excluded from all talks despite being present at the meetings.
A flagship example of this reality-disconnect arrived in the form of the “Structural adjustment” policy replaced by the euphemistic “Poverty Reduction Strategy Papers” (PRSPs) in 1999. The latter sounded wonderfully altruistic but the framework and “solutions” remain exactly the same, namely, to determine other countries economic policies so that they fall into line with the dominant Capitalist model of the West. That means comprehensively trashing social welfare introducing austerity measures in order to pay for the “generous” loans to rebuild its infrastructure. With its headquarters in Washington, D.C., the IMF describes itself as “an organization of 188 countries working to foster global monetary cooperation, secure financial stability, facilitate international trade, promote high employment and sustainable economic growth, and reduce poverty.” The organisation’s stated objectives are to promote international economic cooperation, international trade, employment, and exchange rate stability, including by making financial resources available to member countries to meet balance of payments needs.
The sticking point in all this is that if you increase and promote Neo-Liberal economic policies which are, by nature, elitist and centralist then poverty can only be the end result. Hence the idea of the IMF reducing poverty will still produce large guffaws of incredulity at any self-respecting anti-globalisation gathering. Much like the World Bank, the IMF is better suited as a warden of a global apartheid as described by the Overseas Development Institute (ODI) in 1980. The IMF and the World Bank have overseen the Structural Adjustment scam for decades and it only becomes comprehensible when one sees these giants as glorified loan sharks for the corporate, banking and military sphere as it is in these sectors that the institutions pay dividends.
When the country becomes the victim of a global economy that causes intolerable strains on its economic infrastructure, then it is persuaded to turn to the very institutions that are part of the problem in the first place. If economic catastrophe looms then the IMF is usually the first port of call. This is an open door not just to loans but the whole economic policy that requires a complete “re-adjustment” to their worldview. It is a Faustian bargain and one which leaves the social fabric of the country irrevocably torn. The prioritization of debt repayment overrides all and any other consideration, where GDP becomes the only measurable unit of human currency so that values, community and local business mean nothing.
In order to ensure that the debt remains viable and the corporations and bankers that oversee the privatization and liberalisation that ensues social welfare programs and other cultural initiatives are inevitably cut in order to feed the new black hole of intervention. Deregulating the markets of targeted countries opens them up to rampant speculation, corporate predators and the endemic corruption that goes with it. This means it is much easier to sell off a nation’s assets at sub-standard prices. Haiti is a case in point. In 2000 the IMF stepped in and carried out food terrorism by forcing the nation to accept highly subsidized genetically modified US rice while making sure that Haiti’s farmers did receive the same treatment. US corporations now have the monopoly on Haiti’s food production, distribution and exports with over 50 percent of rice being sold back to the Haitians. The indigenous farmers meanwhile have become yet more victims of the US monoculture and have ended up working in sweatshops for slave wages. [1]
Under structural adjustment, social spending from government budgets to programs and subsidies are all severely cut or reduced in order to quickly start repaying the debt. The whole way of life changes: hospitals, businesses and schools begin to be sucked into the dollar-sign mentality where materialism replaces values and a sense of community are extinguished. The cost of living rises exponentially while the quality of life plummets. Everything becomes a matter of survival as poverty arrives with a vengeance. Meanwhile, bankers and corporatists are upgrading their yachts and opening new off-shore tax accounts.
As we have seen in spectacular fashion, the IMF’s record of bailing out countries (which is really bailing out the Banksters) continued during the 2008 economic collapse up to the present time. IMF bailouts deepen, rather than solve, economic crises except when countries such as Iceland reject the IMF debt slavery and actually take Banksters to court. [2] Bailouts of billions of dollars amount to shoring up a financial system that favours the status quo rather than staving off collapse. South Korea, Thailand, Mexico, Brazil, Russia and others have all experienced the consequences of the IMF’s “helping hand” which led to severe economic instability to surface in other countries. Billions of dollars, pounds and euros have disappeared into a black hole which has meant that vast cuts in social systems under the banner of “austerity measures” have been secured so that the taxpayer actually foots the bill for reckless and criminal activities of the bankers themselves. It is no coincidence that large Anglo-American banking firms made billions of dollars of profit after governments showered them with bailouts while the general public in both Europe and America suffered a massive drop in their standard of living with unemployment soaring to levels unheard of. [3]
The number of Mexicans living in extreme poverty increased to over 50 percent during the 1995 IMF-imposed economic reforms and peso bailout and the national average minimum wage fell 20 percent. This is a familiar story and one which has now led to a severe global depression with the bankers kicking the bailout can further down the street in an attempt to cream as much hedge fund benefits from this financial disaster as they can. They knew it was coming as all good high-level speculators do. This is exactly what has happened in the past to some Asian, European and Latin American countries, most famously Argentina which suffered from a protracted and very serious economic collapse in 2001 after being considered a model of compliance from IMF and US treasury loan “largesse.” [4]
To allow an easy ride for foreign investors to plunder countries targeted by the Structural Adjustment Team restrictions to what can be bought, sold and owned is lifted. Interest rates are also increased in order to push up and maximize profitability for the corporate marauders who then syphon it off to their native countries. Meanwhile, local economies and their communities disappear to produce unemployment, immigration and the increase in the inner city slum quota.
Commensurate with this arrival of what is touted as an economic saviour is the dramatic reconfiguration of agriculture as one of the most important influences of the Structural Adjustment Team. Subsistence farming, community-based local produce and environmentally sustainable practices gives way to monoculture farming predicated on pesticides, herbicides, GM food-stuffs and genetically modified crops. The whole nature of a society and a nation are altered from the control of food and food production. Local competition is quickly eradicated as wealthy landowners and managers take over. The rise in famine and malnutrition surfaces rapidly in response to agribusiness, as does the level of environmental degradation from massive exploitation of resources.
Under the IMF’s take on reality, export production is king; a diversified domestic economy cannot work. At least, not if you are a bankers intent on reaping short term benefit. It literally pays to place the country into debt. Almost 80 percent of all malnourished children in the developing world live in countries where there is a food surplus and farmers have changed from local to intensive farming for the West. [5] Structural adjustments were a euphemism for turning a country inside out and having its insides picked clean by an economic model that was number-based rather than human-based. In summary, it is another form of global, economic imperialism.
In a desperate attempt to prop up the global financial and centralised government systems to which it owes its existence, the IMF released a report called “Taxing Times” in October 2013, outlining schemes to allow bankrupt governments to accrue more money through higher taxes and even confiscate money straight out of our bank accounts. This occurred in the 2012 financial fiasco in Cyprus which saw those with savings above £100,000 lose over 75 percent to government looting which will serve as a template for a more global enterprise enshrined in law.
Massive transfer of wealth to governments and corporations is what the Structural Adjustment Team do so well. Indeed, since people are very much more aware of the danger of having their pensions and savings stolen by this institution it means it must device more devious ways of preventing that resistance. Which is why the report warms to the European Union’s idea of taxing anyone with more assets than debt so that the global financial system remains tied to debt and fiat currency.
Without debt the IMF and its brothers cannot exist. Though the report is dressed up as targeting the tax–haven rich in reality, it is the middle classes who hold much of the proportionate savings thus offering a vast untapped source of revenue. Woe betide the average wage earner and the rich who are not enmeshed in the Establishment as they will become the targets of a new tax regime designed to continue the present iniquities rather than lose them. After all, the IMF realises that it cannot tax the assets of the 1 percent of its super-rich brethren as it wouldn’t be enough to service government needs. However, factor all those middle-class households with positive net wealth then it represents a bonanza of untapped taxation. Taxes of 60 – 70 percent are being touted as a means to find new sources to both increase and feed the debt hole. As corporations and private businesses are also seen as a way to inaugurate a massive new global taxation scheme underpinned by regulatory enforcement it really means that the same centralised system will continue to funnel extortionate amounts of money into pointless government programs which underpin unceasing, infinite maw of debt as the arbiter of economic reality. And the IMF want to erect these new taxes in law before people have a chance to understand what it means: a further tightening of the screw of cartel capitalism where private property and personal assets are up for grabs. True structural reforms will remain absent under the IMF stewardship.
The IMF has a partner in crime.
The WTO acts as the oil between ‘free-trade’ nations encouraging global competition and the unrestricted flow of goods and services. But because globalisation means more and more trans-national companies taking a bigger and bigger slice of the pie then “competition” has come to mean “exploitation” rather than the now almost quaint notion of measured capitalism proposed by the Keynesian model. The WTO is therefore a tool of corporatism like its partners.
It must be considered the height of hypocrisy regarding the standards of these institutions who insist on countries adhering to democratic reforms as prerequisite to receiving their loans. It is clear however that neither the IMF, the WB, the WTO or for that matter the United Nations come close to being examples of anything approaching democratic. While the WTO in particular, may be constitutionally democratic, its actions and net results are perfect examples of the opposite where corruption and financial misappropriation is highly damaging to any countries that fall under its influence.
The WTO is essentially a corporate enabler. It makes sure the small print is limited and regulations designed to protect the consumer and the ordinary man and woman in the street are so diluted as to be non-existent. Trade agreements are the WTO’s forte as is the continuing expansion of the corporate net. But to make sure these trans-nationals have unlimited market access, circumvention of the domestic laws, civil rights, access to natural resources and services of vulnerable countries must be carried out and the WTO trade agreements provide this opportunity, dressed up as benefits for all.
Some of the most important and influential agreements from the WTO include:
- The 1994 General Agreement on Trade in Services (GATS) This “general agreement” means that ways were found to remove any and all domestic restrictions and regulations to trade. It makes a nation’s right to govern itself i.e. its sovereignty is thrown out of the window under the pretext of free trade.
- The Trade Related agreement on International Property Rights (TRIPS) is perhaps the most dangerous “agreement” formed at the Uruguay round of the WTO talks which permits intellectual property rights to include seeds and plants. It is the basis upon which corporations like Monsanto have held farmers to ransom and prosecuted many for planting unlicensed seeds which have already been genetically modified to have a limited life so that farmers must buy a new batch every year. Thousand year old ties to Nature and her knowledge have been tossed out of the window in a matter of a decade. Peter Drahos writes that “It was an accepted part of international commercial morality that states would design domestic intellectual property law to suit their own economic circumstances. States made sure that existing international intellectual property agreements gave them plenty of latitude to do so.” [6]
- The Trade Related Investment Measures (TRIMS) allows domestic finance to fall under the domination of corporate dictates while eroding a nation’s ability to have a say in their own policies regarding foreign investments domestic fiscal policy.
What all this means is that GATS, TRIPS and TRIMS are the means by which vulnerable countries are coerced into giving up their economic, social and cultural independence while their often unique resources are plundered – all under law. They are able to do this because corporate lobbyists have direct access to government policy makers and spend billions of dollars making sure the WTO agreements stay firmly in the court of corporatism. Which is why most developing countries are never able to have a voice or stand up for their rights once they have been seduced by the false promises of loans which are only given on the agreement to implement Structural Adjustment Programs.
[1] Oxfam America Research Backgrounders: ‘Haiti Rice Value Chain Assessment: Rapid diagnosis and implications for program design’ By David C. Wilcock and Franco Jean-Pierren| http://www.files.meetup.com/1337582/Rice%20Value%20Chain%20Backgrounder%20.pdf
[2] ‘Iceland just sentenced its first bankster to prison’ by James http://www.12160.info, Social Network, December 28, 2012.
[3] ‘Eurozone Unemployment Soars to New High’ VOA News, April 2012. – http://www.voanews.com/content/eurozone-unemployment-reaches-record-high/1579633.html | ‘Youth unemployment soars, and it’s not just a phase’ By Heather Stewart, The Guardian, 13 April 2012 -www.guardian.co.uk/business/economics-blog/2012/apr/13/youth-unemployment-rising-work-programme | ‘Gallup Finds Unemployment Rate Soars Following Presidential Election’ By Tyler Durden, http://www.zerohedge.com June 12, 2012.
[4] ‘Economic debacle in Argentina: The IMF strikes again’ – “Argentina’s economic policies during the 1990s were developed under the direction of the IMF. The following article analyses the fatal flaws in these policies.” By Arthur MacEwan, TWN Third World Network via http://www.fpif.org. | http://www.twnside.org.sg/title/twr137b.htm
[5] ‘Facts and Figures About the UN Millenium Goals’ http://www.gender-cawater-net / In its 2000 Millennium Declaration, the United Nations set 8 goals for development, called the Millennium Development Goals (MDGs). These goals set an ambitious agenda for improving the human condition by 2015.
[6] p38; Information Feudalism, By Peter Drahos with John Braithwaite, New Press, 2003 | ISBN-10: 1565848047.
INFRAKSHUN 