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January 31st, 2006

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08:25 pm - The IMF, legitimizing exploitation
You know I never realized that the IMF (International Monetary Fund) is so...messed.
Get this, the IMF lends out money to countries as long as these countries comply with it's list of conditions. Fair right? Ok. Now most of the countries applying for a loan are developing nations, poor already and desperate for something to lift them out of poverty.

So the IMF comes in, and what's the first thing they almost ALWAYS do?
1) Demand the government of that nation to privatize just about EVERYTHING! From healthcare to hydro, it all has to end up in the hands of the wealthy.

2) Then, liberalization of trade. The country HAS to open it's doors to the global market which then of course invites in a flood of imports from the wealthy nations which in turn competes with the local businesses, generally running them bankrupt since the corporations doing the importing are all multinational and there's no way locals can compete.

4) Then, the Central Bank of that nation has to be basically handed over to the IMF...wtf??? Now the IMF gets to decide what infrastructures in the nation needs to be built/fixed, what programs (if any is left after all that privatization) needs to be funded and how much, the government doesn't even have control over its own money anymore!!

5) Finally, the devaluation of the money. Aka, rise the prices of staples food and other basic necessities over night sometimes 3 or 4 times, but not the wages. So what costs say 5 bucks one night, by morning it's 15 bucks, yet you still have the same amount of money in your wallet.

Number 5 alone would drive any nation into poverty. So the nation complies (why?? I don't know, I mean I sure as hell wouldn't), and the IMF loans them the money, keeping a constant eye on insuring that the nation keeps up these wonderful "structural adjustment programs" as they call it. But by now, the nation's in so much poverty that all the loan is needed just to keep the population alive and breathing (if it even makes it to the people, after exchanging hands through all those politicians, I'd venture to guess very little actually goes to productive use). When the loan period ends, whatever profits the nation's made is used usually just to pay off the INTEREST on the loan much less the loan itself. So the nation has to ask for a second loan just to pay back the first loan and the cycle just keeps going.

What kind of cruel people thought up of this demented...thing?! I mean how does any of that make ANY sense in helping ANY nation get OUT of poverty??? Argh!! After studying this for just a little more than a semester I'm more frustrated than ever before at how messed up everything is. That'll be the first thing to go when I get into the United Nations. Some serious changes need to be made to the way the IMF works.
Current Mood: frustratedfrustrated
Current Music: American Idol that my roomie has on...my ears are bleeding

(8 comments | Leave a comment)


[User Picture]
Date:February 2nd, 2006 03:41 am (UTC)
But they don't have a "bargaining chip". Well, no that's not quite true, the only bargaining chip that Third World nations have is the offering of their cheap labour, which the developed nations seem to have no problems exploiting to their full potential. In the case of China, although it's true that more and more the country's entering the global market and gaining ground to playing a key role, the inequalities within the nation amongst the citizens is spreading at an alarming rate. I hate to admit it, but most of China's population is still living in poverty despite whatever development it may have gained. Until the government can stand up to the international cooperations and say enough is enough, the exploitation will continue and I doubt China's government wants to see Wal Mart and Nike pick up their businesses and leave. The same is the case with many other developing nations, even worse in most of their situations since on the global market they hardly play any role.

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