International Monetary Fund (IMF)
The International Monetary Fund is a most controversial organization. Founded after World War II, basically by the Anglosphere, it is supposed to provide financial aid to countries in need. It loans money based on deposits from the institution's 187 (and counting) member countries. Balance of payment problems and problems of state profligacy can be addressed by an IMF loan. The IMF is often seen as a tandem enterprise with the World Bank, which was created at approximately the same time as the IMF.
It was initially conceived in 1944 and was up and running by 1945. Today, its reach is ubiquitous. Some non-members are North Korea, Andorra, Monaco, Liechtenstein, Nauru, Cook Islands, Niue and Vatican City. A 24-member Executive Board is in charge. The IMF is also expanding. In 2010 the G-20 voted to increase IMF funds to US$500 billion. There was an additional disbursement of US$250 billion to member countries via Special Drawing Rights (SDRs).
Despite the expansion, controversy continues, in large part because of the IMF's partnership with the World Bank. In April 2007, Ecuador booted its World Bank representative from the country. A few days later, at the end of April ‘07, Venezuelan president Hugo Chavez announced that the country would withdraw from the IMF and the World Bank. Chavez said the World Bank/IMF tag team are "the tools of the empire."
The World Bank and the IMF work hand in hand. The World Bank loans money to corrupt governments that loot or squander the funds and then the IMF comes in and insists on an "austerity program" of higher taxes and lower government spending to ensure the loans are paid back.
While the IMF is willing to provide either loans or an outright funding stream to the country in question, there are inevitably provisions to be followed. The IMF will likely insist on higher taxes, cuts in services and often privatization of industries. The IMF has gotten a bad reputation with developing countries because its solutions often eviscerate the middle class while the privatizations end up involving fire-sales bid out to Anglo-American corporations.
By exporting consumerism abroad, corporatizing impoverished countries and reorganizing them generally along Anglo-American lines, Western money power has extended its reach around the world without the overt colonialism that caused so much resentment.
The downside (from most people's perspective) is that when the Westernization is concluded, when a given economy has "matured," money power will move on, leaving behind only shambles and social chaos – a carcass nation picked clean of its industrial potential and another treasury filled with worthless scrip.
News & Analysis
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