Adonis Diaries

Archive for August 24th, 2012

 International Monetary Fund:  Top Ten Reasons to Oppose the IMF

I have already written a dozen posts about the calamities and damages that International Monetary Fund has and is still doing on world financial and economic stability.  An extra concise article is a great reminder, from an unknown author.

What is the IMF?

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The International Monetary Fund and the World Bank were created in 1944 at a conference in Britton Woods, New Hampshire, and are now based in Washington, DC.

The IMF was originally designed to promote international economic cooperation and provide its member countries with short-term loans so they could trade with other countries (achieve balance of payments). Since the debt crisis of the 1980’s, the IMF has assumed the role of bailing out countries during financial crises (caused in large part by currency speculation in the global casino economy) with emergency loan packages tied to certain conditions, often referred to as structural adjustment policies (SAPs).

The IMF now acts like a global loan shark, exerting enormous leverage over the economies of more than 60 countries. These countries have to follow the IMF’s policies to get loans, international assistance, and even debt relief.

Thus, the IMF decides how much debtor countries can spend on education, health care, and environmental protection. The IMF is one of the most powerful institutions on Earth — yet few know how it works.

  1. The IMF has created an immoral system of modern-day colonialism:  The IMF — along with the WTO and the World Bank — has put the global economy on a path of greater inequality and environmental destruction. The IMF’s and World Bank’s structural adjustment policies (SAPs) ensure debt repayment by requiring countries to cut spending on education and health; eliminate basic food and transportation subsidies; devalue national currencies to make exports cheaper; privatize national assets; and freeze wages. Such belt-tightening measures increase poverty, reduce countries’ ability to develop strong domestic economies and allow multinational corporations to exploit workers and the environment A recent IMF loan package for Argentina, for example, is tied to cuts in doctors’ and teachers’ salaries and decreases in social security payments…The IMF has made elites from the Global South more accountable to First World elites than their own people, thus undermining the democratic process.
  2. The IMF serves wealthy countries and Wall Street: Unlike a democratic system in which each member country would have an equal vote, rich countries dominate decision-making in the IMF because voting power is determined by the amount of money that each country pays into the IMF’s quota system. It’s a system of one dollar, one vote. The U.S. is the largest shareholder with a quota of 18 percent. Germany, Japan, France, Great Britain, and the US combined control about 38 percent. The disproportionate amount of power held by wealthy countries means that the interests of bankers, investors and corporations from industrialized countries are put above the needs of the world’s poor majority.
  3. The IMF is imposing a fundamentally flawed development model: Unlike the path historically followed by the industrialized countries, the IMF forces countries from the Global South to prioritize export production over the development of diversified domestic economies. Nearly 80 percent of all malnourished children in the developing world live in countries where farmers have been forced to shift from food production for local consumption to the production of export crops destined for wealthy countries. The IMF also requires countries to eliminate assistance to domestic industries while providing benefits for multinational corporations — such as forcibly lowering labor costs. Small businesses and farmers can’t compete. Sweatshop workers in free trade zones set up by the IMF and World Bank earn starvation wages, live in deplorable conditions, and are unable to provide for their families. The cycle of poverty is perpetuated, not eliminated, as governments’ debt to the IMF grows.
  4. The IMF is a secretive institution with no accountability: The IMF is funded with taxpayer money, yet it operates behind a veil of secrecy. Members of affected communities do not participate in designing loan packages. The IMF works with a select group of central bankers and finance ministers to make polices without input from other government agencies such as health, education and environment departments. The institution has resisted calls for public scrutiny and independent evaluation.
  5. IMF policies promote corporate welfare: To increase exports, countries are encouraged to give tax breaks and subsidies to export industries. Public assets such as forestland and government utilities (phone, water and electricity companies) are sold off to foreign investors at rock bottom prices. In Guyana, an Asian owned timber company called Barama received a logging concession that was 1.5 times the total amount of land all the indigenous communities were granted. Barama also received a five-year tax holiday. The IMF forced Haiti to open its market to imported, highly subsidized US rice at the same time it prohibited Haiti from subsidizing its own farmers. A US corporation called Early Rice now sells nearly 50 percent of the rice consumed in Haiti.
  6. The IMF hurts workers: The IMF and World Bank frequently advise countries to attract foreign investors by weakening their labor laws — eliminating collective bargaining laws and suppressing wages, for example. The IMF’s mantra of “labor flexibility” permits corporations to fire at whim and move where wages are cheapest. According to the 1995 UN Trade and Development Report, employers are using this extra “flexibility” in labor laws to shed workers rather than create jobs. In Haiti, the government was told to eliminate a statute in their labor code that mandated increases in the minimum wage when inflation exceeded 10 percent. By the end of 1997, Haiti’s minimum wage was only $2.40 a day. Workers in the U.S. are also hurt by IMF policies because they have to compete with cheap, exploited labor. The IMF’s mismanagement of the Asian financial crisis plunged South Korea, Indonesia, Thailand and other countries into deep depression that created 200 million “newly poor.” The IMF advised countries to “export their way out of the crisis.” Consequently, more than US 12,000 steelworkers were laid off when Asian steel was dumped in the US.
  7. The IMF’s policies hurt women the most: SAPs make it much more difficult for women to meet their families’ basic needs. When education costs rise due to IMF-imposed fees for the use of public services (so-called “user fees”) girls are the first to be withdrawn from schools. User fees at public clinics and hospitals make healthcare unaffordable to those who need it most. The shift to export agriculture also makes it harder for women to feed their families. Women have become more exploited as government workplace regulations are rolled back and sweatshops abuses increase.
  8. IMF Policies hurt the environment:  IMF loans and bailout packages are paving the way for natural resource exploitation on a staggering scale. The IMF does not consider the environmental impacts of lending policies, and environmental ministries and groups are not included in policy making. The focus on export growth to earn hard currency to pay back loans has led to an unsustainable liquidation of natural resources. For example, the Ivory Coast’s increased reliance on cocoa exports has led to a loss of two-thirds of the country’s forests.
  9. The IMF bails out rich bankers, creating a moral hazard and greater instability in the global economy:  The IMF routinely pushes countries to deregulate financial systems. The removal of regulations that might limit speculation has greatly increased capital investment in developing country financial markets. More than $1.5 trillion crosses borders every day. Most of this capital is invested short-term, putting countries at the whim of financial speculators. The Mexican 1995 peso crisis was partly a result of these IMF policies. When the bubble popped, the IMF and US government stepped in to prop up interest and exchange rates, using taxpayer money to bail out Wall Street bankers. Such bailouts encourage investors to continue making risky, speculative bets, thereby increasing the instability of national economies. During the bailout of Asian countries, the IMF required governments to assume the bad debts of private banks, thus making the public pay the costs and draining yet more resources away from social programs.
  10. IMF bailouts deepen, rather than solve, economic crisis:  During financial crises — such as with Mexico in 1995 and South Korea, Indonesia, Thailand, Brazil, and Russia in 1997 — the IMF stepped in as the lender of last resort. Yet the IMF bailouts in the Asian financial crisis did not stop the financial panic — rather, the crisis deepened and spread to more countries. The policies imposed as conditions of these loans were bad medicine, causing layoffs in the short run and undermining development in the long run. In South Korea, the IMF sparked a recession by raising interest rates, which led to more bankruptcies and unemployment. Under the IMF imposed economic reforms after the peso bailout in 1995, the number of Mexicans living in extreme poverty increased more than 50 percent and the national average minimum wage fell 20 percent.

“Trip to the End of the Night” by Ferdinand Celine

This French book, published in the early 1930’s, is basically a collection of authobiographical stories of a freshly graduating physician who established his “clinic” in a poor working neighborhood in the suburb of Paris.

Celine (pen name) used to be called to pay visit to patients after sundown, and his medical tour will last till dawn, from a poor patient to another avorting dying girl because the parents refused to send her to the hospital for face saving…

Celine volunteered in WWI and was caught in the machinery and could no longer escape this infernal absurdity.  He was able to flee to the USA and worked at Ford factories in Detroit. He returned to France and studied medicine.

The followings are excerpts, not of the stories, but of the kind of statements that the living among miseries bring up in our mind and emotions.

It is imperative to comprehend why we are so stubborn to refuse a cure for our solitude…We keep hiding from acquaintances. I recall the words of this young corporal, hospitalized during the war. He confided: “Earth is sick and dead, and we are fat decaying worms…All rotten since birth…” He was good enough to be carried by two soldiers to be executed by a firing squad: He was an anarchist as the War council decided…I didn’t know better at the time to take time and listen to these soldiers: I wouldn’t know how to ask the right questions anyway…

The old patient was saying: “I can’t feel my feet, I feel cold up to my knees. I can’t drink anything…I want to touch my feet but I can’t…” He was kind of half out of life, he couldn’t get rid of his lungs…He exhaled but air would come in anyway. Kind of his lungs relentlessly making him suffer to the very end. That’s a harsh job staying alive…He struggled as harder to stay alive as to die

Life is a special class of boredom and annoyances, and they are the eternal pions. Boredom is here all the time, spying on you, and you have to frequently look occupied, at any price…Masturbating is an excellent pass time: You are occupied and getting some pleasure.  Mostly, we would like to have an endless series of pleasure-like activities to survive the long 24-hour day. A day is really very long to surmount and suffer the ever ready presence of boredom…Even in our continuous boredom, we refuse to reflect on ourselves…Nothing very pleasurable here, self-reflection.

It is impossible to swallow truth, like the death of your lover, or the death of your kid…The more distant the lover, literally, the more you cannot communicate face to face, and smell the rotten flesh…You keep adding and heaping values, good traits and lies to the reality of love…It’s natural and regular this tendency, loving from afar…

The little people can claim to have lived, only if the manage to overcome this habit of blind obedience, inculcated in the brain since childhood, and they should vomit obeying the rich and the authority figures once for al.

The balanced youth is who can respect everyone with no discrimination whatsoever…How come we cannot find these kind of youth?

It is not relentlessness that we ever lacked, but how to be on the proper road that lead to a tranquil death. The worst case scenario is when death takes us by surprise, in between two hesitations…

War is ever ready to wake up and grumble, due mainly to the criminal boredom that gets the little people out of their confined caves…How many of the poor people should be sacrificed before they comprehend the humour of it?

Note: Read part 2: https://adonis49.wordpress.com/2012/08/26/part-2-trip-to-the-end-of-the-night/


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August 2012
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