Global Policy Forum

By Doreen Miller

Imagine placing a 50-pound featherweight boy with one hand tied behind his back into a ring with a 500-pound sumo wrestler, expecting the boy to compete against this colossal giant. "How absurd! Anyone can see they are grossly mismatched. Why, the boy doesn't stand a chance," observers might remark. However, this is precisely the scheme by which the International Monetary Fund (IMF) and World Bank operate in over 60 Third World countries.

When, due to inflationary oil prices or hard economic times, developing nations suddenly find themselves in urgent need of money, they soon discover they have no other place to turn for a bailout except to the largest and monopolistic loan sharks on the block, formally known as the IMF and World Bank.

In their desperation for a cash infusion, leaders of these struggling communities end up signing the Faustian Bargain which virtually turns over control of their country's economy and government to the interests of the multinational corporations and major industrialized countries that underwrite the World Bank bonds which float these loans.

Under the threat of being cut off from any and all forms of international borrowing, financially strapped nations are backed into a corner and compelled into agreeing to adhere to a very long list of IMF's so-called austerity measures and structural adjustment policies.

These are sometimes referred to as "SAPs," a quite befitting acronym since these policies literally "sap" the lifeblood out of the very economies they are alleging to help.

Disturbingly, the World Bank and IMF shrewdly neglect to inform their loan applicants that the same policies they are hawking have had a 40-year proven track record of abysmal failure and have contributed to an upward spiraling of Third World debt, poverty and exponential growth of inequalities of income and wealth around the world.

The typical M.O. (method of operation) of the IMF and World Bank consists of systematically weakening and ultimately destroying existing economies of debtor nations in order to pave the way for transnational corporations to come in and reap the stolen harvest of underpaid labor of a people made destitute and desperate for work.

First, under the dictates of the SAPs, any and all forms of social safety nets governments may have in place for their people must be eliminated.

Countries are forced to radically downsize government operations, to freeze or cut wages, to cut public pensions and unemployment benefits, to impose user fees for formerly free government-provided services such as health care, education, and clean drinking water, and to privatize all publicly owned, generally profitable enterprises, among which may be gas, oil, telephone, rail and electricity. This restructuring, in effect, renders thousands of employees jobless and creates whole new, displaced underclasses that suddenly can no longer afford to pay for even the basics.

Next, the IMF tells these same countries that, in order to procure money to pay off their debt, they need to open up their borders to the global free trade market. Of course, "the only way" to accomplish this is to outlaw all forms of protectionism, like trade tariffs on imports and government subsidies of local industries, so as to successfully entice other nations to trade with them.

This is referred to as a "leveling of the playing field," clever Orwellian doublespeak for giving rich nations unrestricted access to a country's markets and cheap labor. Again, true to form, the IMF conveniently fails to mention to these fledgling countries that they will be competing against economic mammoths, such as the United States, whose crops and exports, contrary to the rules debtor nations are compelled to follow, are heavily subsidized by their governments.

Once trade barriers have been eliminated, foreign goods pour into the markets of these nations at cutthroat prices, putting formerly prosperous industries out of business. Small business owners and farmers using traditional, labor-intensive methods despairingly find themselves unable to compete against the megalomaniacal, highly mechanized, government-supported enterprises of the United States and other industrialized nations.

The tiny island of Jamaica has experienced first hand what it means to live under the dictatorial rules of the IMF. Whole swaths of once-cultivated, fertile farm lands now lie fallow due to the inability of local farmers to compete with the torrent of cheaper crops from California flooding their markets. A once thriving, local dairy business finds its fresh milk is no match price-wise for the heavily subsidized, powdered version shipped in from the United States with the result that it now teeters on the edge of bankruptcy and collapse.

A $40 million, World Bank supported investment that built a high-tech, state-of-the-art Jamaican meat-processing plant to supply McDonald's franchises in Jamaica with burgers made from local cattle met with a wall of resistance from McDonald's. Even though many regard the Jamaican beef as superior in quality, from cows raised under humane, free-range conditions, fed grasses and pure unadulterated grain, and untainted by the many hormones and antibiotics typically pumped into U.S. American cattle, McDonald's refuses to do business with this plant. To this day, McDonald's continues to import all of its beef from the United States into Jamaica, proving once again that investment in local businesses takes a back seat to foreign interests and profit.

Adding insult to injury, once an economy has been severely compromised, transnational corporations come in under the guise of alleviating poverty and unemployment, and are granted the right to build and establish "free zone" manufacturing areas which are exempt from paying any local fees or taxes.

They then hire domestic workers, desperate for income, at sub-standard wages and pressure them, under sweatshop conditions, to assemble products that, when completed, are immediately exported back out to wealthy nations. Like the true leeches they are, these corporations even go so far as to ship in any and all materials needed to make their products, essentially guaranteeing that no local businesses benefit in any way.

In Haiti, workers for these transnational corporations earn barely enough to cover 60% of their costs of living, relegating them to a life of abject poverty, while the top CEOs of the very companies they work for rake in salaries to the tune of hundreds of millions of dollars a year.

The Hanes/Sara Lee Corporation, Disney, Nike, Addidas, Reebok, JCPenney, Sears, and WalMart are just a few examples of U.S. companies that actually seek out Third World countries with high unemployment rates and weak environmental and labor laws in order to set up shop and maximize profits.

Take into account that the IMF, the World Bank and countless, exploitive, transnational U.S. corporations are de facto representatives of the United States. Now multiply the aforementioned scenarios to the nth degree in countries around the globe.

Considering what is being perpetrated in our names, is it any wonder that the U.S. is so utterly resented and despised throughout the world? Could therein lie a conceivably plausible and significant part of the answer to George W. Bush's question: "Why do they hate us so much?" In light of these harsh realities, Bush's overly simplistic and ill-founded explanation that "they resent our freedom and democracy," merely serves to underscore the depth and extent of his ignorance and callous unwillingness to put two and two together.

A statistical overview of countries operating under the trusted tutelage of the IMF reveals a telling pattern of skyrocketing debt. Jamaica, Haiti, Mexico, Ecuador, Kenya, Nigeria, Brazil, Colombia and countless other struggling nations around the world who have faithfully swallowed the prescriptions handed out by the IMF have witnessed the doubling and tripling of their initial debt load over the years. Most, if not all, dole out more in interest payments (anywhere from 21 to 70 percent) to the IMF, World Bank, and foreign banks than they do to support and develop their own infrastructure and essential social services.

For the most horrifying and glaring example of the devastating effects of IMF intrusion, we need look no further than present-day Argentina, a country whose economy has completely imploded under the onerous and crippling weight of IMF rules and regulations. Are these cases and others simply the casualties of a free trade system, as the IMF and World Bank would have us believe? Is that which is good for the United States and developed nations really good for developing countries as well? If so, then why have double standards been put into place that, in effect, tie the hands of these nations to set their own import/export rules and run their internal affairs while allowing rich, developed countries to do as they please?

The draconian measures being forcibly implemented by the IMF and World Bank in low and middle-income countries are based upon a capitalist model which provides no place for exercising social consciousness or serving the greater common good. Capitalism, as it is currently practiced, worships exclusively its one-and-only true god, the almighty dollar, and thus, its driving force is based upon its sole tenet, the expansion of profit margins and accumulation of greater wealth.

The ultimate success of such a system depends on a constant, reliable pool of bargain-basement workers in order to ensure maximum profit, hence, the ensuing global rat race to the bottom by companies in search of dirt-cheap labor and production costs.

For all practical purposes, the IMF and World Bank in collusion with rich, capitalist empires have created what amounts to the modern-day equivalence of slavery.

These financial institutions, whose most powerful member with the greatest influence and largest voting block is the United States, are nothing but henchmen for the interests, priorities, and benefit of wealthy nations, corporations, and select individuals. They serve to keep poor countries in a state of perpetual indebtedness so as to guarantee their benefactors a steady stream of income and an endless source of underpaid, or more precisely, "slave" labor.

Unfortunately, a pragmatic analysis of this situation recognizes that the coziness of this profitably exploitive arrangement precludes any real incentive by the lending parties to institute effective, meaningful, socially beneficial reforms to the IMF's and World Bank's presently skewed policies.

Those seeking deeper insight and revelation as to the underlying reasons and motives of these and other institutions of the rich and powerful for maintaining the status quo can find the answer within the poignantly articulated lyrics of Joni Mitchell's "Passion Play": "Who're you gonna get to do the dirty work when all the slaves are free? Who're you gonna get?"

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