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| Seth Tekper, Ghana Finance Minister |
The
World Bank and I.M.F. are both international institutions who receive funds
from a number of different states, with contributions generally being
proportionate to the size of those countries' economies. They were set up with
the intention of providing finance for developing states, which were usually to
be in the form of loans rather than actual grants.
The
I.M.F. was founded in 1945 and now involves 183 countries. Essentially it acts
as an agency representing the interests of the world's financial institutions.
As Susan George writes:
One
might… accurately describe the Fund's role as that of a messenger, watchdog,
international alibi and gendarme for those who do hold financial power… (The)
bedrock of the world monetary system is the private banks, with states
(including their central banks and treasuries) acting as guarantors. The fund
works on their behalf." (16, p.47)
The
World Bank is, as Bernard Nossiter put it, a 'sister agency to I.M.F.', (17)
having similar quotas and voting structures.
The
World Bank and I.M.F. have played an important role in shaping macro-economic
policy in the South (i.e. policy towards taxation, public spending and trade.)
Indeed, their interventions have been important in bringing about the kind of
'free trade' world that is embodied in the G.A.T.T. agreements. The World Bank
and the I.M.F. have been able to influence the economies of developing
countries through the loans (and sometimes, in the case of the World Bank, grants)
that they have made to states of the South.
The
pattern of lending grew sharply in the 1970s when there was a steep increase in
World Bank loans that grew from U.S.$2.7 billion a year in the early 1970s to
$8.7 billion by 1978. (10; p13) As Bello points out, in these early stages,
Bank policy, which was largely a reflection of U.S. interests, had important
political as well as economic objectives. Strong national movements led by the
likes of Sukarno of Indonesia and Nasser of Egypt, as well as more typically
Soviet-style state-run regimes that sided with the U.S.S.R. in the Cold War,
were demanding fundamental changes in North-South relations. Bello et al refer
to this as the 'other cold war' in which the World Bank, led by former U.S.
president Robert McNamara in the 1970s can be seen to have initiated policies
to 'contain' the South through a policy of increased loans. Provision of loans
gave the North increased involvement in these states, which was taken even
further by the I.M.F., as discussed below.
Whilst
there were some loans from the World Bank to the South during the 1970s, a
larger proportion of loans were from private, commercial banks. By the 1980s,
the scale of developing states' debts to (in particular their debt to the
private, commercial banks) meant that a further round of loans was need to meet
their repayments. The World Bank and I.M.F. stepped in at this stage to bail
them out by greatly stepping up their supply of credit to the already indebted
states, as Bello describes:
the
flow of commercial bank credit to the Third World plummeted, while that of the
official finance institutions increased sharply: in 1981, commercial banks
supplied 42 per cent of net credit flows to the Third World and official
finance institutions 37 per cent, but by 1988 the private banks provided only 6
per cent of net debt flows and official finance institutions 88 per cent of the
total. Most of the inflow of official money was used by debtors to service
their debt to the private banks. Between 1982 and 1986 Third World countries
received U.S.$25 billion more from official creditors than they paid out to
them, while they paid the commercial banks $183 billion more in interest and
amortization than they received in new bank loans.(10; p69)
The
I.M.F. had not, on the whole, been involved in the loans of the 1970s
(supplying less than 5% of the finance to developing countries between 1974 and
1979–16; p48) but became an increasingly important agent in the management of
the debts of the South from the early 1980s. The notorious 'structural
adjustment' policies that were initiated by the I.M.F. in most of the Southern
debtor countries, had the aim of making debtor states more profitable and so
able to make more loan repayments in the medium to long term.
S.A.P.s
have been applied to many countries across the globe, from Chile to Russia and
from Somalia to the Phillipines, from the 1980s onwards. Surveys of these
programmes, such as that of Chossudovsky(11) show that certain key policies
were consistently included in each S.A.P.
Privatisation.
State owned companies were sold to the private sector. Often, this would pave
the way for them to be bought up by foreign capital. It also helped to generate
revenue for the state and hence contributed to debt repayments.
Removal
of subsidies. Subsidies previously granted by the state to various sectors of
the economy were disallowed, with many local producers suffering as a result.
Favourable loans and credit that were previously provided for small businesses
were also curtailed.
Removal
of tariffs. This policy was designed to encourage imports and exports. Goods
previously produced within a country for consumption at home were increasingly
imported. Production at home became more specialised and geared to the export
market, with a range of cash crops being encouraged—examples include cocoa in
Ghana, tobacco in Zimbabwe, prawns in the Phillipines being encouraged. (As
explained above, the G.A.T.T. agreements had reduced protectionism which also
encouraged the adoption of more export-orientated policies.)
Reduction
in state expenditure. Another means for the creditors to ensure future loan
repayments was to impose a further policy of reducing state expenditure.
Devaluation
of the national currency. This was usually necessary to compensate for a
balance of payments deficit.
Chossudovsky
summarises the effect of S.A.P.s on the economy of debtor states, pointing out
how many industries that produced for domestic markets within the South were
pushed to bankruptcy As a result of an S.A.P., he writes, economies are
"opened up through the concurrent displacement of a pre-existing
productive system. Small and medium-sized enterprises are pushed into
bankruptcy or obliged to produce for a global distributor, state enterprises
are privatised or closed down, independent agricultural producers are
impoverished." (11; p16)
A
widely documented outcome of S.A.P.s is the large cut in state expenditure.
This invariably goes far beyond the reduction in subsidies to the
domestically-orientated industries referred to by Chossudovsky above. Public
goods such as health and education were drastically cut back in debtor states,
as part of a policy of 'fiscal tightening.' As a result, Michel Chossudovsky
points out, "even the World Bank concedes that the communicable diseases
control programmes of developing countries for diarrhoea, malaria and acute
respiratory infections have deteriorated." The consequences for education
systems are equally evident, with teacher pupil/ ratios worsening. The full
scale of the impact of reduced public expenditure is, of course, much too great
to be documented here.
There
is certainly no shortage of evidence of the suffering faced by the working
class in countries of the South in the wake of S.A.P.s An example could be made
of virtually any country where an S.A.P. has been adopted and indeed they are
by writers such as Walden Bello and Michel Chossudovsky. Bello writes about
Chile:
"While
it socialized the losses of the rich, the authorities dumped the burden of adjustment
on to the poor and the middle class via a radical cutback in public spending, a
tough freeze on wages, and a steep devaluation of the peso. The 24 per cent
contraction of domestic expenditure provoked a 15 per cent drop in G.D.P. and
triggered unemployment, which rose to embrace over 10 per cent of the workforce
in one year and remained at over 25 per cent for three years. And the 50 per
cent real devaluation of the peso was translated mainly into a reduction of
real wages by close to 20 per cent." (10; p45)
Bello
adds that "more than 50 per cent of the unemployed received no subsidy and
the rest obtained only minor benefits"(10; p45)
S.A.P.s
certainly caused the working class to suffer in debtor states but improvement
of their welfare was not a real objective of these policies. It is, after all,
the very nature of captialism that working class interests—i.e. higher wages,
environmental protection and better public services will conflict with the
interests of the minority, owning class. (Why
Profit Gets Priority.) To understand S.A.P.s further, we need to evaluate
them against the aims that they were designed to achieve.
Different
forms of measurent are needed to determine the effectiveness of S.A.P.s in
serving the interests for which they were designed. The main measure of success
considered by the The World Bank and I.M.F. would have been medium to long term
economic growth statistics. (You need look no further than the literature
produced by these organisations to see that economic growth is the yardstick by
which they guage the outcome of their policies.) They would also have been
paying close attention to the impact of the policies on foreign investment in
the debtor states. These statistics are to do with the investment of capital
within a country which is of course, a prerequisite for profits to be made.
According
to the pro-'free market' mantra, an improvement in growth would eventually
'trickle down' to the working class majority, via wages. It is, of course,
deeply questionable whether such a 'trickle down' occurs and there is, in fact,
little or no evidence for such a 'trickle down' having taken place. (From
Third World to First World.) Still, we should examine the impact that
S.A.P.s had on investment and growth in the countries concerned.
One
objective of the policies certainly succeeded—that of increasing Foreign Direct
Investment (F.D.I.):
Between
1973 and 1991, the world stock of F.D.I. grew in current dollars from $211.1
billion to $1,836.5 billion, a growth rate of roughly 13 per cent per year.
From the perspective of the advanced capitalist countries, the origins of the
vast majority of F.D.I., this stock grew substantially faster than G.D.P.
amounting to about 6.7 per cent of G.D.P. in the early 1970s and rising to
nearly 9 per cent at the beginning of the 1990s."(13; p27)
MacEwan
has calculated that this 1991 F.D.I. figure is 8.5 per cent of total world
output. He remarks that this could be viewed as a return to early twentieth
century levels, given that it was 9 % in 1913.(13; p27) Still, it is a significant
rise relative to the 1960s and the economic climate of more liberalised trade
as well as 'structural adjusment' in the South were important factors in
bringing this about.
The
Multilateral Agreement on Investment (M.A.I.) drawn up by the O.E.C.D. during
the late 1990s, was an attempt to rollback still further the remaining
hindrances to foreign direct investment. The M.A.I. negotiations for the
agreement collapsed—this was held as an important victory by the critics of
globalisation whose pressure contributed to the proposal being questioned and
eventually withdrawn. However, the European Union is still pushing for a
watered-down version of this proposal to be agreed with the hope of paving the
way for an eventual agreement.
For
an explanation of what is meant by economic growth, see Where
Do Profits Come From? We shall now examine whether economic growth
increased in countries where S.A.P. policies were implemented. Bello suggests
that numerous I.M.F. studies provide the evidence that economic growth rates
have not been improved by S.A.P.s.
Bello
et al write:
Comparing
countries which underwent stabilization and adjustment programmes with those which
did not, over the period 1973–1988, (I.M.F.) economist Mohsin Khan found that
'the growth rate is significantly reduced in program countries relative to the
change in non-program countries.' He concluded that while balance of payments
and inflation rates are likely to improve in the first year of adjustment,
these programmes 'do involve some cost in terms of a decline in the growth
rate.' Mohsin Khan quoted in
Peter Robinson and Somsak Tambunlertchai, 'Africa and Asia: Can High Rates of
Economic Growth Be Replicated?, Occasional Papers, International Center for
Economic Growth, No.40 (1993), p.24. " (10; p32)
Having
surveyed the various studies on the subject, Chossudovsky reaches a similar
conclusion:
Although
there have been a few studies on the subject over the past decade, one cannot
say with certainty whether programmes have "worked" or not… On the
basis of existing studies, one certainly cannot say whether the adoption of
programmes supported by the Fund led to an improvement in inflation and growth
performance. In fact it is often found that programmes are associated with a
rise in inflation and a fall in the growth rate.(11)
Mohsin
Kahn's study appears to offer strong evidence against the use of S.A.P.s, even
in terms of the holy grail of free market capitalism, 'economic growth.' It
should be noted that, one important factor behind Mohsin Kahn's results was the
marked success of certain countries that did not undergo S.A.P.s during the
1980s, notably certain 'tiger economies' of East Asia, such as Malaysia, South
Korea, Taiwan and Hong Kong. By contrast, the majority of countries in the
poorest continents—South and Central America and Africa have undergone
adjustment programmes. There were certainly other important factors behind the
relative success and failures of these two sets of states, aside from the
presence or absence of adjustment programmes, which make any such comparison a
poor test of the 'success' of S.A.P.s.
An
exploration of all of these factors would be an entirely separate study in
itself but they would certainly include the relative economic starting
positions of the states in the 1960s, prior to the involvement of World Bank/
I.M.F. in their policies as well as the stability of their political systems.
(See below for further discussion of the course taken by the Asian tigers, some
of which avoided the 'free trade' and 'structural adjustment' policies
encouraged by the North.)
Rather
than Mohsin Kahn's cross-country comparison as a way of defining the success or
failure of a S.A.P., it would be more accurate to define their success relative
to how an adjusted country would have fared were no S.A.P. to have taken place.
This does, of course, present difficulties of it's own, given that we are asked
to compare against a scenario that will never exist. No definitive conclusion
can be reached about what the growth rates of adjusted countries would have
been without the I.M.F. Still, we can point to certain factors which suggest
that growth rates would have been unlikely to be much better in the absence of
S.A.P.s. We shall now do this by considering the impact upon growth of three
key elements of S.A.P.s: reduced state subsidies, the move towards
export-orientated industries and currency devaluation.
The
nationalised or subsidised industries in the South that S.A.P.s sought to
privatise or withdraw subsidies from were often inefficient and less profitable
than the market demanded. While, as has been pointed out, the impact on the
working class of reductions in state expenditure was devastating, it helped
states to further reduce their tax burden. This general reduction in the level
of taxation contributed to the increased F.D.I., as pointed out above without
which growth rates would have been lower in those countries which received
investment.
Another
significant factor in considering how Southern countries would have fared
without S.A.P.s is remembering that these countries would still have been faced
with their large debt burdens. Their debt was indeed a significant factor in
the expenditure cutbacks required by the I.M.F. and meant that there was only
limited government capital available for any kinds of 'development' project
that might constribute to building the right infrastructure for increasing
growth. Any capital that was available had to be supplied by creditors who
required future repayment.
The
need for future repayments on debt gave rise to an important shift. The huge
reductions in state subsidies to industry and the breaking down of
protectionist barriers did cause domestic industries to suffer. Restricting the
role of the state in this way did, nevertheless, take precedence over short
term economic growth. The programmes gave priority to export-orientated
industries over many of the industries which primarily served domestic markets
(often including a large proportion of a states' agriculture). This was the new
path, viewed as the surest route to profitability, which happily married with
the T.N.C.s desire to expand their production and markets.
There
are many examples of states specialising in the production of a single good for
export: An extreme case was the copper industry in Zambia which came to
represent 90% of total output. The figure for copper in Chile was 50%. Coffee
in Colombia, El Salvador, Guatemala, and Haiti became crucial to these
economies, as did cocoa in Ghana, bauxite for Guyana and tin for Bolivia. (17;
p148)
The
export-orientated policy has been widely criticised for forcing developing countries
to become vulnerable to shifts in the market price of these cash crops.
Furthermore, the worldwide implementation of these policies in many cases
caused worldwide over-production and so the push towards cash crops started to
undermine itself. This happened, for example, to cocoa production, which was
simultaneously expanded in numerous countries. As a consequence, there was a 48
per cent decline in the world cocoa price between 1986 and 1989" (10; p47)
and countries such as Ghana, where the I.M.F. had encouraged a greater reliance
on this single crop, suffered as consequence. This criticism has been countered
by the argument (put forward by Bernard Nossiter amongst others) that a fall in
the price does not necessarily mean a reduction in profits, given that demand
for the good could increase. Yet the newly export-orientated economies of the
South did in fact suffering due to a fall in commodity prices, with sub-Saharan
Africa being one notable example.
Much
of the criticism of I.M.F./ World Bank policy points to the failure to bring
long term economic stability to developing countries. The preservation of a
diversity of industries in these countries would have certainly made their
economies more robust in the face of the continuing, unpredictable shifts in
the market. However, there was often a trade-off between having this diversity
and achieving the kind of profitability which would satisfy the World Bank and
other creditors. Many of the critics of the drive towards profitable exports
underestimate the power of such a short term opportunity for profit within
capitalism. An inherent part of the capitalist system is for rival companies to
make higher profits in the short term, so as to be able to out-grow their
competitors. For this reason the very instability that critics quite rightly
despair of is inherent to capitalism itself. (See Booms and Slumps—What Causes
Them?)
There
had been a tremendous economic incentive for the initial round of lending in
the 1970s, as is borne out by the huge growth in exports from the South during
this time.
GATT
examined forty-six developing countries who account for most of the third
world's output, apart from oil. Between 1966 and 1981, their manufactured
exports multiplied twenty times, from $3.8 billion to $78.7 billion. Although
inflation accounted for perhaps two thirds of this expansion, the result is
still remarkable. Their share of world manufacturing exports rose from 6
percent to 11 percent, nearly double. Raw materials exports expanded six times,
from $14.9 billion to $92.2 billion; their share of world exports was unchanged
at l2 percent.(G.A.T.T.—Prospects
for Increasing Trade Between Developed and Developing Countries
(Geneva, Switzerland: 1984), quoted in 17; p.24)
Bello
et al, who are amongst the many critics of S.A.P.s acknowledge exports were an
effective means of generating profits that were used to make substantial loan
repayments to the commercial banks who had provided them with credit during the
1970s:
This
policy was enormously successful, effecting as it did an astounding net
transfer of financial resources from the Third World to the commercial banks
that amounted to U.S.$178 billion between 1984 and 1990; By 1992, the tenth
anniversary of the debt crisis, the exposure of U.S. banks in the South had dropped
from its 1987 level of 140 per cent of equity to 29 per cent. For all intents
and purposes, the crisis was over for the creditors.(10; p69)
Vietnam
provides an example of this profitability being achieved. Chossudovsky notes
that G.D.P. grew after a S.A.P. was implemented, "largely as a result of
the rapid redirection of the economy towards foreign trade (development of oil
and gas, natural resources, export of staple commodities and cheap-labour
manufacturing). Despite the wave of bankruptcies and the compression of the
intemal market, there has been a significant growth in the new export-oriented
joint ventures." (11; p58)
The
fact that this growth was achieved largely at the expense of Vietnam's
manufacturing industry, was not a problem in the eyes of those who provided
credit to the country, who were solely concerned with receiving a profitable
return on their loans. In fact, the dismantling of industries such as oil, gas,
natural resources and mining, cement and steel production presented an
opportunity for them, in the words of Chossudovsky, "to be reorganised and
taken over by foreign capital with the Japanese conglomerates playing a
decisive ane dominant role " He continues: "The most valuable state
assets were to be transferred to joint-venture companies." (11; p52)
Japan benefitted from
the S.A.P. in Vietnam:
"The
tendency is towards the reintegration of Vietnam into the Japanese sphere of
influence, a situation reminiscent of World War II when Vietnam was part of Japan's Great East Asia Co-Prosperity
Sphere. This dominant position of Japanese capital was brought
about through control over more than 80 per cent of the loans for investment
projects and infrastructure. These loans channelled through Japan' s Overseas Economic
Cooperation Fund (O.E.O.F.) as well as through the Asian Development Bank
(A.D.B.) supported the expansion of the large Japanese trading companies and
transnationals." (11; p57 )
Vietnam
was not the only such example—many of the 'adjusted' countries developed export
sectors that were highly profitable, at least for a certain time. Yet, even for
the capitalist interests of the North, there is little or no positive result
that can be drawn from several of the world's poorest states. Zambia is a case in
point, having been forced to request eleven reschedulings of debt between 1975
and 1987 (16; p117)
 |
| Ghana President John Mahama |
A
pre-condition of I.M.F. loans was often a devaluation of borrower nation's
currency. This was usually done by linking the currency to a more widely used
currency (this would usually have been the U.S. dollar) and setting the value
lower than the previous level. On other occasions, a devaluation simply meant
allowing the value of the currency float to a free market level, given that the
debtor state had been artificially 'propping it up' on the foreign exchange
markets, so as to reduce the cost of imported goods.
Devaluations
were often introduced by the I.M.F. to counter policies of 'overvaluation' that
were adopted by numerous governments in the South prior to the arrival of the
I.M.F. This overvaluation policy is described by an O.E.C.D. report, cited by
Nossiter:
governments
discovered another device to make life in the capital more agreeable. They
maintain overvalued currencies. They demand more francs or dollars for their
nairas and cedis than these currencies would fetch in a free market. This
discourages farmers from producing crops for export, from investing their own
labor on irrigation works or buying seed and fertilizer. The return from export
crops in cedis, nairas, and the rest is painfully small. For the period 1976 to
1980, the World Bank calculated that Ghana paid its cocoa farmers 40 percent of
what they would have received in world markets; Tanzania gave its coffee producers
23 percent; Mali made cotton growers accept 43 percent, and Malawi its tea
planters 28 percent. Conversely, the overvalued currencies make imports a
bargain in the cities. Elites can enjoy cheap Audis or a Mercedes-Benz,
inexpensive air conditioners, television sets, and even food from
abroad.(Zambian Mismanagement (1965–80)—OECD, Development Cooperation, 1983,
p.20—quoted in 17; p109)
As
discussed below, S.A.P.s shifted the emphasis of Southern economies towards
exports and a devaluation made them more competitive. Devaluations also aimed
to counter what were often high rates of inflation in the South and ensure
monetary stability that, from the point of view of thier creditors, was
essential for managing their debt.
Devaluations
had a drastic effect on domestics prices in many of the countries that
underwent an adjustment programme. One extreme (but not unique) example was
Peru, where the impact was dubbed the 'Fujishock' (named after President
Alberto Fujimori who agreed to implement the programme in August 1990.)
Chossudovsky notes that, in Peru, "fuel prices increased 3l times
overnight whereas the price of bread increased 12 times. The real minimum wage
had declined by more than 90 per cent in relation to its level in the
mid-1970s" (11; p38)
Critics
of globalisation often focus upon particular policies such as devaluation.
Whilst the short term impact of the resulting price rises was devastating, it
needs to be acknowledged that this social impact was not the primary concern to
the I.M.F. and the banks they represent. It was a necessary part of the
re-negotiation of loan agreements to ensure that the future repayments would be
forthcoming, in so far as was possible.
Indeed
the O.E.C.D. report cited above points out that the pre-I.M.F. policy of overvaluation
conflicted with the interests of peasant farmers, who were unable to sell the
produce on export markets and were forced to settle for a much lower income as
a result. In the case of Zambia, "Farm prices were held so low that
peasant buying power dropped 65 percent." On the other hand, due to
overvaluation reducing the cost of imports: "The system, in other words,
drains incomes from poor farmers to the better-off city-dwellers" (quoted
in 17;109)
Overvaluation
of a currency, as shown, also holds disadvantages. More recently, the I.M.F.
intervened in the Russian economy as it appeared to be on the verge of collapse
and sought to prop up the Russian ruble at what critics described as an
'overvalued' level. Third World Network criticise this policy:
In
Russia, the IMF insisted on maintaining an overvalued fixed exchange rate,
requiring that country to raise interest rates as high as 150 percent—leading
not only to excessive foreign debt burdens, but maintaining a speculative
bubble in the financial sphere, and drained the real economy of investment
capital. The overvalued ruble kept imports artificially cheap, hobbling
domestic production, and exports overly expensive—until the currency collapsed
in 1998. A similar policy was supported in Brazil—with the government raising
interest rates more than 50% and borrowing billions from the Fund to stabilize
its overvalued currency, only to have it collapse just a few months later.(24)
That
overvaluations, as well as devaluations, have disadvantages, suggests that
capitalism offers no straightforward solution to the question of fixing
currency values. Criticisms of devaluation policies point out the problems that
arise from it but not the reasons why the I.M.F. enforce them.
As
with the question of the motives behind capitalism's move towards free trade,
the policies imposed upon the South by the I.M.F. through Structural Adjustment
Programmes can only be understood in terms of the economic interests of certain
sections of the global capitalist class. Among these interested parties were
the financial institutions who lent money to the South during the 1970s, the
multinational and other companies looking to exploit the resources (both labour
power and natural resources) of the South, as well as sections of the
capitalist class within the states of the South themselves, who owned some of
the export orientated industries within those countries.
The
banks (most significantly U.S. banks who supplied the South with the majority of
their loans during the 1970s) needed to ensure that the countries of the South
were making enough profit to be able to repay their debts. This explains why
S.A.P.s shifted the emphasis of Southern economies towards production for
export. Such industries were widely viewed as where the 'comparative advantage'
(and hence largest profits) of these countries lay. The I.M.F. are often
targetted by the anti-globalisation lobby, yet they were simply the agency who
conducted a policy that was necessary for the major Northern banks. (It should
also be noted that Southern debt originates from the 1970s before the I.M.F
took on this role.)
Besides
the banks, other multinational companies of the North were themselves
interested in gaining from such industries by setting up operations there
themselves. Examples of this include the U.S. multinationals who moved into
Central and South America to exploit the primary resources there, such as fruit
and timber. To maximise their profits in these countries, such companies needed
to ensure that the state took on the most minimal role when it came to taxing
and regulating them. Here, S.A.P.s and the G.A.T.T. can be viewed very much
within the same context—that of providing a profitable climate for the
businesses operating within a 'developing' country. The G.A.T.T. guaranteed
only minimal regulation of the activity of transnational corporations.
Similarly, S.A.P.s were a globally recognised assurance that there will be no
'unnecessarily' high levels of pulic spending and hence a lower tax burden.
Another
parallel can be drawn with the supposedly 'free trade' policies of the North,
when we consider how far S.A.P.s sought to impose a 'free market' model upon
the South. Again, when we look beyond the free market rhetoric with which these
policies are often introduced, it can be seen that this is not exactly the
classic 'free market' model of economic textbooks. To characterise it as such
ignores, as has been observed by many critics of globalisation, the common
practice of I.M.F. loans being used to subsidise export-orientated industries.
These subsidies were important in the establishment of many of the export
orientated industries of the South. Critics of globalisation have often
suggested that the development of Southern economies could have been quite
different had these subsidies been granted to the industries within these
countries that produced for domestic markets. Such a policy is one of the
suggested ways that the worst effects of globalisation could be avoided.
Credit:
Socialist Standard
Editorial
Whose
Agenda?
On the front page of this issue is the story
headlined “The Truth About the IMF” and it shows clearly that the institution
was set up primarily to promote Western financial interests.
There
can be no doubt that the International Monetary Fund’s (IMF) main focus is to
push all so called third world countries on the path of neo-liberalism and to
shore up the profits of the multi-national corporations.
The
IMF has never been interested in the pursuit of the ends of collective self-reliance
of the African people.
It
has never been interested in the preservation of national independence and
development of indigenous technology.
The Insight is fully convinced that the IMF’s agenda runs
directly counter to the objectives of the Ghanaian and African independence
movement.
Unfortunately,
leaders of Ghana over the last forty years or more have develop such abiding
faith in the IMF to the extent that they even disregard the needs and
aspirations of citizens.
Ghanaian
and African leaders have a choice to either become stooges of the IMF or servants of their people. There is no
middle course.
If
the leaders chose to be stooges of the IMF, there can only be one consequence.
They will no longer be our leaders because we will withdraw our mandate and
take our destiny into our own hands.
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