Last Updated: Friday - 09/24/2010
March 22, 1999
IMF is colonialism ruled by new oligarchy
You cannot read anything about global debt without stumbling across the acronym IMF. What does it mean?
Towards the end of the Second World War there was a desire among western nations to set up a new international monetary system. To that end the major nations met in Bretton Woods, U.S., to create an organization that would guard the stability of currencies, regulate international monetary relations, control the amount of money in circulation and support countries with balance of payment difficulties.
This agency was called the International Monetary Fund.
In conjunction with the IMF, the World Bank was founded to provide long-term loans to developed and developing countries.
The funds at the disposal of the IMF come from three sources:
1) The contribution of member nations. Each nation has 250 votes and one vote per $100,000 quotum. The more you contribute the more influence you have. Poor countries have no say in the matter.
2) Interests on loans arranged by the IMF; it runs into the tens of billions of dollars, much of it from poor nations.
3) Credit that the IMF is allowed to create. This is something like printing money but no actual paper bills are involved. A member state has the right to draw on credit 4.5 times its quota. Again this rule favours the affluent nations.
The U.S. holds 20 per cent of the votes, Western Europe holds 28 per cent, the third group is made up of developing countries which are represented by developed countries and the fourth group consists of developing countries including the oil producers.
The Majority World, representing 83 per cent of the world's population, can at best hope for a 35-per-cent vote if consensus were possible. Many important decisions require an 85 per cent majority. That gives the U.S. a veto.
The IMF insists that all its decisions are politically and ideologically neutral and strictly based on scientific research. Nevertheless the IMF's strategies are based on the conviction that "free trade and the unhindered functioning of the market forces will lead to a strong international economy and prosperity."
The influence of the IMF is most strongly felt in countries which struggle with a shortage of their balance of payments. If a loan to such a country is approved, the IMF moves in and virtually takes over from the local government by insisting on conditions which are called structural adjustment programs (SAP). These programs are imposed on nearly every developing country in the world and ruthlessly enforced.
So overwhelming is the power that the World Bank and the IMF wield on behalf of the world's largest corporations and the financial institutions that the cumulative effect has been the creation of market colonialism ruled by a small financial oligarchy affecting the livelihoods of more than 80 per cent of the world's population.
The IMF has been quite successful in the recovery of its investments, but the patient tends to die a slow death on the operation table.
As a result of SAP, the internal purchasing power in the developing world has collapsed, health clinics and schools have been closed, infectious diseases such as TB, cholera and malaria have reappeared, millions of people have been evicted and forcefully displaced and the environment gets a beating through deforestation, mono-culture practices and outright plunder to pay off the debt.
Some people believe that the IMF is one of the four horsemen of the book of Revelation and bad news for the poor.
Copyright © 1998, 1999, 2000, 2001, 2002, 2003, 2004, 2005, 2006, 2007, 2008, 2009 -- Western Catholic Reporter
Our mission: To serve our readers by bringing the Gospel to bear on current issues in the Church and in secular culture through accurate news coverage and reflective commentary.