IMF is not the good Samaritan

IMF is not the good Samaritan

By T.J. Addati

This is the first of two articles on the role of the
International Monetary Fund and the World Bank in the global
economy.

JAKARTA (JP): American folk tradition frequently refers to the
"Company Store". On his first day in a new job the hapless fellow
and his hungry family are shown into the store, told to take what
they need and not to worry about having no money. But the family
must pay its bill the following week when the man gets paid. By
the time pay day comes around the family needs more food and thus
more credit. And then, of course, there is the interest on the
first weeks loan.

One way or another, the hapless worker never escapes from his
debt to the mill, factory, mine, or whatever kind of company
store it was, and is trapped for life. The store was a clever
means of relieving the working poor of their meager pay and
conveniently repatriated most of their wages back into the
company. The sting didn't end there if the worker happened to
rent company housing.

When the economic history of the late 20th century is written,
the IMF will be portrayed in much the same light -- a clever
means for extracting money from poor, subjugated countries and
directing it into rich financial institutions, while incidentally
keeping the poorer countries in a mire of debt and struggling to
meet interest payments.

Make no mistake, while untold thousands of the working poor in
America "owed their souls to the Company Store", as the popular
song goes, what the IMF is after is not your soul, but your
economy -- labor, natural resources, and any spare cash you
happen to have lying around.

The IMF is not a charitable organization or an aid agency
prepared to rush in and altruistically rescue a struggling
country. Whatever its original mandate, it has become an
instrument dominated by financial interests with no interest in,
or patience with, archaic national borders. Furthermore, it is
completely inured to ignoring the aspirations of ordinary people
in society. It acts on behalf of people who want their money
back, and beyond that they want labor and national wealth in
whatever form, and they want it cheap.

The IMF did not gift US$43 billion to Indonesia. If it gets
its own way, the money will barely come to rest in this country.
The funds are not delivered to Soekarno-Hatta International
Airport in suitcases full of cash to be handed out to help the
Indonesian people through these hard times. The money is not
invested in education, health, public transport, public water
projects or loans to small business, with just a little skimmed
off the top for our officials.

The money arrives electronically and, if it can be arranged,
will quickly leave the same way, back into the waiting arms of
creditors, barely leaving a trace of its presence.

The money will not be invested in programs dear to the hearts
of ordinary Indonesians. The impact of IMF structural adjustment
on education, health care, public transport, public water supply
and all other social service systems, will be devastating. This
can be seen in as many as one hundred other developing countries
around the world who have become involved with the IMF and the
World Bank.

Even if the rescue package money was a form of aid, it would
not be used for public projects, in which the IMF and the World
Bank have little faith. They have a fundamentalist zeal for
private property and profit alone. Privatizing health care is
more important to them than delivering such a service.

However, there is one area where the IMF believes in just the
opposite. It believes in public financing and funding. The crisis
in Indonesia was not precipitated by public debt. It was caused
by private individuals acting in their own private interest as
private lenders and private borrowers, perhaps reckless, greedy
and foolish borrowers, but private nonetheless.

That Indonesian society could be knocked back a generation and
the last 30 years of progress erased because of the actions of
private lenders and borrowers should make us all pause for
thought. Ordinary Indonesian people, who had no part in
manufacturing the crisis, will pay dearly for this tragedy
through their labor and lost aspirations.

Middle class taxpayers in rich countries, who are hardly rich
themselves, know nothing of any of this. But they too will pay
for it because the IMF uses their tax money to run its
operations, and they will never see that money again.

The largest contributor to the IMF's rescue package is the
American taxpayer, but very few Americans had a hand in creating
our current situation. Most private sector loans were issued by
Asians, Europeans and Japanese, who took a chance and lost, but
still insist on getting their money back. The IMF has taken their
side in this argument, against people who had no part in creating
the crisis.

The IMF is against assisting domestic banks and creditors,
while insisting that foreign banks and creditors be rescued.
Debtors who cannot repay their loans will not be paraded on
television sets around the world to let us see who it was that
caused all this trouble. Most likely they will retain their
comfortable homes, cars and cellular phones, and escape virtually
unscathed by this tragedy.

Meanwhile, thousands of Indonesian students will be obliged to
drop out of university and tens of thousands of children will
have to leave school. Millions of adults will lose their jobs and
tens of thousands of elderly people will no longer be able to
afford medical care.

At the same time, the IMF and the World Bank will attempt to
privatize everything from education to health care and convert
private debt into public debt with their conscience untroubled.