FRIENDS OF THE POOR

"One Filipino child is said to die every hour, in a country where more than half the national budget is given over to paying just the interest on World Bank and IMF loans." John Pilger, Hidden Agendas.

The outgoing head of the International Monetary Fund (IMF) became the latest victim to be pied last Sunday. In a farewell speech at a meeting of the United Nations Conference on Trade and Development (UNCTAD)in Bangkok, Michel Camdessus claim that the IMF "are best friends of the poor" was clearly too much for one outraged person, who pied him full in the face. Splat!

And SchNEWS can reveal that the pie in the face is nothing compared to the global protests being planned when the IMF next meets at Washington DC in April!

So why all the fuss? Whats the IMF? Read on for your quick economics lesson...

In 1944, 44 nations met in the New England village of Bretton Woods to construct a new framework of stability and national sovereignty for the post-war economy. This little gathering gave birth to three beautiful offspring... The IMF, the World Bank and the WTO (which at that time was called the General Agreement on Tariffs and Trade or GATT). Frederic F.Clairmont, in The Rise and Fall of Economic Liberalism described the Bretton Woods creation as "a lethal totalitarian blueprint for the carve up of world markets".

The IMF, in its infancy, was set up to maintain currency stability and develop world trade, but as it grew up it got bigger and badder. In the 1970s, the Organisation of Oil Producing Countries (OPEC) shoved large amounts of money in western banks which the banks then loaned out to developing countries. When governments began to run into trouble with the repayments, the IMF and World Bank hastily stepped in to bail out the private banks. The transfer of private debt into public liability was therefore complete - the third world debt crisis had begun! In order that third world governments rescheduled their debts and received new loans, the IMF imposed certain conditions, conditions called structural adjustments.

Structurally adjusted...

Countries whose economies are going down the pan can receive loans from the IMF in return for a bit of adjustment. Adjustment, to the IMF, means de-regulation of industry, cutbacks in public services and subsistence farming abandoned to cash crops. In short, the economic direction of the country is planned, monitored and controlled by the IMF in Washington. Lovely! Or as John Pilger put it, "the surrender of sovereignty, and without a gunboat in sight." Any Governments that refuse to comply are cast into financial darkness and refused further loans.

In 1997, the foreign debt of developing countries was $2 trillion. Put another way this is $400 for every man, woman and child, while the average income in these countries is less than a dollar a day. Meanwhile... net nerd Bill Gates is worth over $60 billion; more than $1.5 trillion changes hands on the global currency market each day; the Worlds richest 200 people are worth more than $1 trillion!!!

The IMF: Working wonders worldwide...

Chile was the first lucky recipient of the IMFs restructuring revolution under Augosto Pinochets regime. This resulted in industries being dismantled and the majority of Chileans being plunged into poverty. At the end of this programme, Chiles debt was higher than it was at the start. Surely this was a failure? Oh no, the IMF were proud of the results!

The reign of ruin spread to Africa, the poorest continent in the world where more money is spent of debt repayments than on healthcare. What a lovely target...the IMF rubbed its hands with joy as they took over the management of the economies, increasing debt by 400%. In the city of Lusaka in Zambia, four out of every five people are unemployed and half of the newly privatised companies are bankrupt. Nicaragua is equally fortunate, structural adjustments have moved the economic burden from the rich to the poor. Living standards have declined and many state workers face a bleak future owing to the privitisation of almost everything.

Dictators, unsurprisingly, are very good at applying IMF policies, and so have been very successful at receiving loans. Very often this money has not reached the poor who suffer most through the subsequent debt. In the Philipines, the late Ferdinand Marcos managed to build up a wealth of $10 billion thanks to International Aid. On his departure, the IMF refused to cancel repayment and simply moved the burden to the Filipino government who had to raise taxes and end rice subsidies. In Brazil there is no record for 80% of the amount borrowed by the former military dictatorship.