IMF is not a good Samaritan (2)

IMF is not a good Samaritan (2)

By T.J. Addati

This is the second of two articles on the role of the
International Monetary Fund (IMF) and World Bank in the global
economy.

JAKARTA (JP): In all fairness to these institutions, there is
one important respect in which countries may appear to be
strengthened after receiving their assistance: the Gross National
Product (GNP) has sometimes risen significantly after the
conditionalities and the structural adjustments have been made.
The same will probably be true in Indonesia.

Here is an example of how this can work. Small farmers growing
food for local consumption is meaningless in the global context.
But squeeze small farmers off their land to make room for large
agribusiness projects growing interesting crops for export --
that is good business, that kind of agriculture makes money, that
will raise the GNP in a way small farmers growing food for local
consumption never will.

Never mind that farmers are driven off their land, family life
is damaged, the backbone of small villages are broken, more
people have to move into already unprepared and overcrowded urban
areas, local crops eaten by local people are increasingly scarce
(even to the point of famine in several countries), unemployment
increases and salaries for those who are employed are driven
down.

All of this combined with increased urban overcrowding, less
available or affordable food and cutbacks in government health
clinics predictably produces higher rates of infant mortality,
malnutrition and preventable disease.

Rates of domestic violence rise, more children and teenagers
enter the sex industry, crime rises, and police have to become
ever more coercive in order to control ever more numbers of
desperate people. The effects operate about the same way in just
about all industries catering to local people, because local
industry is not the point. Domestic economy for domestic
consumption does not profit multinational corporations, but cheap
labor manufacturing goods for export does.

Given the deepening poverty and the competition for any kind
of job, people will be happy to take factory jobs for little pay,
no benefits, poor working conditions, and no job security
whatsoever.

A country with its national economy in order, a self-
sufficient, self-reliant, self-contained country would be of no
interest to the IMF or the World Bank, for it could not be
obliged to send all of its surplus wealth out of the country to
service its debt.

The whole point for the IMF is for Indonesia to maximize
profit in every possible industry and then be obliged to send
every bit of it abroad to service its debt. Look at Nicaragua.
Double-digit growth for the past several years and every bit of
the profit sent out of the country to service its debt. Look at
Mexico. Under the IMF all of the profits from its oil-export
revenues went abroad until the debt was paid. If you have a
problem meeting a payment, not to worry, they will extend to you
another kind of loan to tie you over. And don't worry about that
increasing your debt stock. That is the point. These institutions
are not interested in you paying off the principle on these
loans. The idea is to keep you paying the interest, and paying to
perpetuity, and to keep you dependent.

That is where food aid comes in. Food aid is a big business,
although "aid" is a misnomer because it would lead one to believe
that it is a gift. Agribusiness concerns all over the developed
world lobby their governments for a piece of the action. Most
food aid consists of heavily subsidized, surplus or poor quality
grain, meat, or dairy products, which companies hope to dump on
poor countries. It's profit for them, makes the donors look good,
and has the added advantage of further undercutting and weakening
local agriculture and destroying national food security.

If a country can be encouraged to become dependent on food
aid, all the better for international agribusiness, banks and
corporations. Food has to be imported from places eager to sell
it, lots of companies make money along the way, and the debt
stock is increased if new borrowing has to be made to pay for it.
In fact new borrowing is probably already taking place just to
keep up to date on payments.

All of this and worse has happened practically everywhere
these institutions have operated and it is a scandal of global
proportions. It is in essence a two-decade-long massive movement
of wealth from poor and needy countries to the richest
institutions on the planet, already awash with cash, and needful
of nothing.

If you cannot help but wonder why this much misery and
injustice isn't one of the chief preoccupations of the mass
media, remember that the mass media is yet one more component of
the vast corporate world, now more powerful than many
governments.

The same corporate executives and corporate lawyers who sit on
the boards of multinational corporations and transnational
corporations, also sit on the boards of the great press
institutions and the huge mass media organizations. They are
there to ensure that the news and information you receive is
compatible with corporate interest. Just in America alone there
are more than 170,000 people employed in public relations firms
and policy institutes, not to mention tens of thousands of others
in government and military bureaucracies, spending billions of
dollars a year to shape and spin the news and information you
receive, and to omit or disparage anything deemed unsuitable or
undesirable.

In just the public relations sector alone, this is 40,000 more
people than work as actual news reporters. At this point in time,
for example, between 40 percent and 50 percent of the news and
information found in the Wall Street Journal, or practically any
other media outlet, originates with government and corporate
public relations departments. The scale and influence of this
industry, wholly dedicated to perpetuating whatever myths are
convenient at any particular time, is constant, unrelenting and
pervasive.

It will come as no surprise to Indonesians to hear that in
every country of the world finding groups of people willing to
support the interests of the great international banks,
corporations, and assorted financial institutions is easy. The
business elite in Indonesia, as in virtually every territory and
country on earth, has always been willing to support business
interests above the interests of the people. They in turn are
surrounded by a large class of professional and technical staff
and their families, who while not rich and powerful themselves,
have become by virtue of their education, relationships,
professions, friendships, employment, and lifestyle, supportive
of these interests.

After all, they have much more in common with friends from
university, business schools, engineering schools, professional
schools, either here or abroad, involved in the same types of
businesses and subscribing to the same types of theories, than
they have with rice-farmers, kampong dwellers, factory workers,
and of course, indigenous peoples of the forests. Certainly these
professional classes and allied personnel throw their lot in with
the business elite and support all of this. After all, it is
their support.

Nonetheless, the lessons of 50 years of IMF and World Bank
activity are obvious. The gap between the richest 20 percent of
countries and the poorest 20 percent of countries has doubled in
the last two decades. Much can be gleaned from their own figures,
reports and statistics. While the World Bank has cleaned up its
act somewhat in recent years, it took it 40 years for it to
realize that its aid never reached the poor and that its projects
were environmentally destructive.

The IMF, on the other hand, is full of hubris, ideology, and
power, and is unlikely to notice or acknowledge the fact that
never in the history of the earth has so much misery and
injustice been perpetrated on so many people all over the world,
all at the same time. And it is said that the only thing worse
for poor people than the IMF is war.

Window: Nonetheless, the lessons of 50 years of IMF and World Bank
activity are obvious. The gap between the richest 20 percent of
countries and the poorest 20 percent of countries has doubled in
the last two decades.