[P2P-F] IMF (an excellent article)

Sun Jun 26 15:21:45 CEST 2011

I have read some of Stiglitz' work - that is why now the Asian countries are
creating their own bank away from the "Washington CON senus"

:)
M

On Sat, Jun 25, 2011 at 10:29 AM, Michel Bauwens <michelsub2004 at gmail.com>wrote:

> thank you Mike!
>
>
> On Sat, Jun 25, 2011 at 2:09 PM, mike stagman <artemesium at yahoo.co.uk>wrote:
>
>>  Published on Friday, June 3, 2011 by the Independent/UK<http://www.independent.co.uk/opinion/commentators/johann-hari/johann-hari-its-not-just-dominique-strausskahn-the-imf-itself-should-be-on-trial-2292270.html>
>> It's Not Just Dominique Strauss-Kahn. The IMF Itself Should Be On Trial
>> Imagine a prominent figure was charged, not with raping a hotel maid, but
>> with starving her, and her family, to death
>> by Johann Hari <http://www.commondreams.org/johann-hari>
>>
>> Sometimes, the most revealing aspect of the shrieking babble of the 24/7
>> news agenda is the silence. Often the most important facts are hiding
>> beneath the noise, unmentioned and undiscussed.
>>
>> So the fact that Dominique Strauss-Kahn, the former head of the
>> International Monetary Fund (IMF), is facing trial for allegedly raping a
>> maid in a New York hotel room is – rightly – big news. But imagine a
>> prominent figure was charged not with raping a maid, but starving her to
>> death, along with her children, her parents, and thousands of other people.
>> That is what the IMF has done to innocent people in the recent past. That is
>> what it will do again, unless we transform it beyond all recognition. But
>> that is left in the silence.
>>
>>
>> To understand this story, you have to reel back to the birth of the IMF.
>> In 1944, the countries that were poised to win the Second World War
>> gathered in a hotel in rural New Hampshire to divvy up the spoils. With a
>> few honorable exceptions, like the great British economist John Maynard
>> Keynes, the negotiators were determined to do one thing. They wanted to
>> build a global financial system that ensured the money and resources of the
>> planet were forever hoovered towards them. They set up a series of
>> institutions designed for that purpose – and so the IMF was delivered into
>> the world.
>>
>>
>> The IMF’s official job sounds simple and attractive. It is supposedly
>> there to ensure poor countries don’t fall into debt, and if they do, to lift
>> them out with loans and economic expertise. It is presented as the poor
>> world’s best friend and guardian. But beyond the rhetoric, the IMF was
>> designed to be dominated by a handful of rich countries – and, more
>> specifically, by their bankers and financial speculators. The IMF works in
>> their interests, every step of the way.
>>
>>
>> Let’s look at how this plays out on the ground. In the 1990s, the small
>> country of Malawi in Southeastern Africa was facing severe economic problems
>> after enduring one of the worst HIV-AIDS epidemics in the world and
>> surviving a horrific dictatorship. They had to ask the IMF for help. If the
>> IMF has acted in its official role, it would have given loans and guided the
>> country to develop in the same way that Britain and the US and every other
>> successful country had developed – by protecting its infant industries,
>> subsidizing its farmers, and investing in the education and health of its
>> people.
>>
>>
>> That’s what an institution that was concerned with ordinary people – and
>> accountable to them – would look like. But the IMF did something very
>> different. They said they would only give assistance if Malawi agreed to the
>> ‘structural adjustments’ the IMF demanded. They ordered Malawi to sell
>> off almost everything the state owned to private companies and speculators,
>> and to slash spending on the population. They demanded they stop subsidizing
>> fertilizer, even though it was the only thing that made it possible for
>> farmers – most of the population – to grow anything in the country’s feeble
>> and depleted soil. They told them to prioritize giving money to
>> international bankers over giving money to the Malawian people.
>>
>>
>> So when in 2001 the IMF found out the Malawian government had built up
>> large stockpiles of grain in case there was a crop failure, they ordered
>> them to sell it off to private companies at once. They told Malawi to get
>> their priorities straight by using the proceeds to pay off a loan from a
>> large bank the IMF had told them to take out in the first place, at a 56 per
>> cent annual rate of interest. The Malawian president protested and said
>> this was dangerous. But he had little choice. The grain was sold. The banks
>> were paid.
>>
>>
>> The next year, the crops failed. The Malawian government had almost
>> nothing to hand out. The starving population was reduced to eating the bark
>> off the trees, and any rats they could capture. The BBC described it as
>> Malawi’s “worst ever famine.” There had been a much worse crop failure in
>> 1991-2, but there was no famine because then the government had grain stocks
>> to distribute. So at least a thousand innocent people starved to death.
>>
>>
>> At the height of the starvation, the IMF suspended $47m in aid, because
>> the government had ‘slowed’ in implementing the marketeeing ‘reforms’ that
>> had led to the disaster. ActionAid, the leading provider of help on the
>> ground, conducted an autopsy into the famine. They concluded that the IMF
>> “bears responsibility for the disaster.”
>>
>>     {By the way, ActionAid has written that 2/3 of PATENTS are never
>> marketed.  Patents are a nice part of the whole problem of Slavery by
>> corporations and their bought-governments.-- M.S.}
>>
>>
>> Then, in the starved wreckage, Malawi did something poor countries are not
>> supposed to do. They told the IMF to get out. Suddenly free to answer to
>> their own people rather than foreign bankers, Malawi disregarded all the
>> IMF’s ‘advice’, and brought back subsidies for the fertilizer, along with a
>> range of other services to ordinary people. Within two years, the country
>> was transformed from being a beggar to being so abundant they were supplying
>> food aid to Uganda and Zimbabwe.
>>
>>
>> The Malawian famine should have been a distant warning cry for you and me.Subordinating the interests of ordinary people to bankers and speculators
>> caused starvation there. Within a few years, it had crashed the global
>> economy for us all.
>>
>> \
>>
>> In the history of the IMF, this story isn’t an exception: it is the rule.
>> The organization takes over poor countries, promising it has medicine that
>> will cure them – and then pours poison down their throats. Whenever I travel
>> across the poor parts of the world I see the scars from IMF ‘structural
>> adjustments’ everywhere, from Peru to Ethiopia. Whole countries have
>> collapsed after being IMF-ed up – most famously Argentina and Thailand in
>> the 1990s.
>>
>>
>> Look at some of the organization’s greatest hits. In Kenya, the IMF
>> insisted the government introduce fees to see the doctor – so the number of
>> women seeking help or advice on STDs fell by 65 per cent, in one of the
>> countries worst affected by AIDS in the world.
>>
>>
>> In Ghana, the IMF insisted the government introduce fees for going to
>> school – and the number of rural families who could afford to send their
>> kids crashed by two-thirds. In Zambia, the IMF insisted they slash health
>> spending – and the number of babies who died doubled. Amazingly enough, it
>> turns out that shoveling your country’s money to foreign bankers, rather
>> than your own people, isn’t a great development strategy.
>>
>>
>> The Nobel Prize winning economist Joseph Stiglitz worked closely with the
>> IMF for over a decade, until he quit and became a whistle-blower. He told me
>> a few years ago: “When the IMF arrives in a country, they are interested in
>> only one thing. How do we make sure the banks and financial institutions
>> are paid?... It is the IMF that keeps the [financial] speculators in
>> business. They’re not interested in development, or what helps a country to
>> get out of poverty.”
>>
>>
>> Some people call the IMF “inconsistent”, because the institution supports
>> huge state-funded bank bailouts in the rich world, while demanding an end to
>> almost all state funding in the poor world. But that’s only an inconsistency
>> if you are thinking about the realm of intellectual ideas, rather than raw
>> economic interests. In every situation, the IMF does what will get more
>> money to bankers and speculators. If rich governments will hand banks money
>> for nothing in “bailouts”, great. If poor countries can be forced to hand
>> banks money in extortionate “repayments”, great. It’s absolutely consistent.
>>
>>
>> Some people claim that Strauss-Kahn was a “reformer” who changed the IMF
>> after he took over in 2009. Certainly, there was a shift in rhetoric – but
>> detailed study by Dr Daniela Gabor of the University of the West of England
>> has shown that the substance is business-as-usual.
>>
>>
>> Look, for example, at Hungary. After the 2008 crash, the IMF lauded them
>> for keeping to their original deficit target by slashing public services.
>> The horrified Hungarian people responded by kicking the government out, and
>> choosing a party that promised to make the banks pay for the crisis they had
>> created. They introduced a 0.7 per cent levy on the banks (four times higher
>> than anywhere else). The IMF went crazy. They said this was “highly
>> distortive” for banking activity – unlike the bailouts, of course – and
>> shrieked that it would cause the banks to flee from the country. The IMF
>> shut down their entire Hungary program to intimidate them.
>>
>>
>> But the collapse predicted by the IMF didn’t happen. Hungary kept on
>> pursuing sensible moderate measures, instead of punishing the population.
>> They imposed taxes on the hugely profitable sectors of retail, energy and
>> telecoms, and took funds from private pensions to pay the deficit. The IMF
>> shrieked at every step, and demanded cuts for ordinary Hungarians instead.
>> It was the same old agenda, with the same old threats. Strauss-Kahn did the
>> same in almost all the poor countries where the IMF operated, from El
>> Salvador to Pakistan to Ethiopia, where big cuts in subsidies for ordinary
>> people have been imposed. Plenty have been intimidated into harming their
>> own interests. The US-based think tank the Center for Economic and Policy
>> Research found 31 of 41 IMF agreements require ‘pro-cyclical’ macroeconomic
>> policies – pushing them further into recession.
>>
>>
>> It is not only Strauss-Kahn who should be on trial. It is the institution
>> he has been running. There’s an inane debate in the press about who should
>> be the next head of the IMF, as if we were discussing who should run the
>> local Milk Board. But if we took the idea of human equality seriously, and
>> remembered all the people who have been impoverished, starved and killed by
>> this institution, we would be discussing the establishment of a Truth and
>> Reconciliation Commission – and how to disband the IMF entirely and start
>> again.
>>
>>
>> If Strauss-Kahn is guilty, I suspect I know how it happened. He must have
>> mistaken the maid for a poor country in financial trouble. Heads of the IMF
>> have, after all, been allowed to rape them with impunity for years.
>>
>>
>> © 2011 Independent/UK
>>  [image: Johann Hari] <http://www.commondreams.org/johann-hari>
>> Johann Hari is a columnist for the London Independent<http://www.independent.co.uk/>.
>> He has reported from Iraq, Israel/Palestine, the Congo, the Central African
>> Republic, Venezuela, Peru and the US, and his journalism has appeared in
>> publications all over the world.
>
>
>
>
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