DATELINE: A16 Doing business as usual, IMF
and World Bank spread
poverty & struggle
By Lynette E. Thoman
Planet Waves Digital Media. Illustration by Via Davis........Bankers of the world UNITE!!
.......That was exactly the agenda set for the IMF meeting in Washington Sunday, April 16, 2000 through Monday, April 17. It is indisputable that the unwritten goal of the IMF and the World Bank is to integrate the elites of all countries into the capitalist world system of rewards and punishments. Economic paternalism has been operating for more than 50 years and to date has been successful.
.......The United States of America is Big Daddy, practicing corporate control over the world economy. Not that the U.S. doesn't deserve the role as head of the world family: the US dollar enjoys unrivalled dominance in the global financial markets. In 1995 it comprised 61.5% of all central bank foreign exchange reserves; it was the currency in which 76.8% of all international bank loans and 39.5% of all international bond issues were denominated; it served as the invoicing currency for 47.6% of world trade; and it was one of the two currencies involved in 83% of all foreign exchange transactions.
.......The fiction that all of this is the product of a historical accident is constantly being sold (for an ideological profit). The IMF and the World Bank were created simultaneously, at an international conference held in Bretton Woods, New Hampshire near the end of World War II. Economists from the United Kingdom and the United States were the primary architects of these two institutions. Ideology was supplied by Harry Dexter White, an American, and John Maynard Keynes, a British economist. Operations began in Washington, DC in May 1946 with 39 members.
.......During World War II, the capitalist classes were busy either supporting the Nazis or fleeing Europe. Leftists were maintaining a defense against the Nazi regime. As a means of preventing the working classes abdicating to the left politically, and creating an economic foothold in Europe, it was imperative that Britain and the U.S. ensure power resided in the capitalist classes. The creation of the World Bank and IMF solidified the power of the industrial corporate sector by promoting an international economic institution.
.......The World Bank's objective, as reflected by its formal name -- "The International Bank for Reconstruction and Development -- was to assist in the reconstruction of global infrastructure which had been marred by the war. The means of control included establishing world commerce by reducing foreign exchange restrictions and using World Bank reserve funds to lend to countries experiencing difficulties so trade could continue without interruption. However, at that time the notion of the "Third World" had not yet crystallized. The Third World as we know it today emerged as the IMF strengthened its policies.
.......The operation of the IMF is simple: billions of dollars controlled by the IMF and World Bank are lent to debtor countries and the monies arrive packaged in stipulations that are conducive to the profit margins of the capitalist elite. "Structural adjustments" are spelled out to ensure that the recipient of the loan open its national economy to foreign corporations; in particular, access to their low wage workers and natural resources at less than market value rates is enforced. National responsibilities are also transferred to the IMF: authority to attempt a national balanced budget , sell off publicly owned assets (often to the foreign investors) and devalue national currency.
.......Countries are forced to cut their budget deficits by increasing exports, usually at the expense of natural resources like minerals, lumber and food. When the IMF/World Bank forces other countries to devalue their currencies and reduce consumption to increase sales of their valuable resources to the Developed World, this lowers the value of their labor and commodities and raises the relative value of manufactured products from the Developed World. The low level of wages prevalent overseas is linked not to low productivity of labor-time, but to undervalued exchange rates and the workings of the currencies on the basis of relative productivity of workers.
.......To put it another way, while the average amount produced per unit of time by workers in Mexico or Brazil is lower than in the U.S., the difference in wages at present exchange rates far exceeds the difference in productivity. Thus, the purchasing power of U.S. dollars is much bigger in Mexico or Brazil than it is in their countries of origin. Wage levels in Mexico, when measured against the dollar, declined by 60% from 1980-1990, another 40% in 1994-95, in Argentina by 50% and in Peru by 70%and that was before the 1997-98 collapse of Developing World currencies.
.......Comparing the price of primary commodities to the price of manufactured commodities from the late 19th century to shortly before World War II, then looking at the same commodity equation now is quite sobering. During the last 50 years, the primary-commodities price dropped 60% relative to the manufactured-commodities price. Typically, World Bank debts are incurred for investments to extract resources, produce agricultural exports and build the infrastructure to ship these commodities to the Developed World at the expense of health and education programs. These programs are further sacrificed in repayment of the debt at the astronomical interest rate attached to the monies owed.
.......World Bank president James Wolfensohn described as "demoralizing" accusations that the bank is to blame for world poverty, environmental destruction, and a host of other injustices. He claims the World Bank employs thousands of workers to combat exactly those problems. "It is a bit demoralizing when you see that there is a mobilization for social justice when you think that that's what we're doing every day," Mr. Wolfensohn told reporters in Washington on Wednesday, April 12.
.......Despite Mr. Wolfensohn's protests, insistence that poorer nations reduce their education, reduce their health care, eliminate supports for industry, reduce the wages of an already impoverished labor force, enforce a monopoly on industrial technology and the imposition of unequal trades upon the undeveloped world is precisely the morality he advocates. Imperialism and conquest are alive and well at the beginning of the 21st century!
.......The solidarity of voices heard in the protests thus far says that we will have some say in effecting our own sense of morality. Economic parenting must be replaced by co-parenting between equals. The recent outpouring of energy and support from people and organizations all over the globe send one message loud and clear. Just watch as the children of Big Daddy grow up!++
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