The tyranny of Global Finance
20 November 2006
Globalization brings growth? Think again. Debt-engineered by the IMF
International Monetary Fund Along with the World Bank, the IMF was founded on the day the Bretton Woods Agreements were signed. Its first mission was to support the new system of standard exchange rates.
When the Bretton Wood fixed rates system came to an end in 1971, the main function of the IMF became that of being both policeman and fireman for global capital: it acts as policeman when it enforces its Structural Adjustment Policies and as fireman when it steps in to help out governments in risk of defaulting on debt repayments.
As for the World Bank, a weighted voting system operates: depending on the amount paid as contribution by each member state. 85% of the votes is required to modify the IMF Charter (which means that the USA with 17,68% % of the votes has a de facto veto on any change).
The institution is dominated by five countries: the United States (16,74%), Japan (6,23%), Germany (5,81%), France (4,29%) and the UK (4,29%).
The other 183 member countries are divided into groups led by one country. The most important one (6,57% of the votes) is led by Belgium. The least important group of countries (1,55% of the votes) is led by Gabon and brings together African countries.
http://imf.org and Word Bank-sucks countries dry.
In the last decade, neoliberal policies have created debt and global impoverishment on a massive scale. In this updated edition of his internationally recognized book, Eric Toussaint traces the origins and development of the crisis in global finance.
This new edition is fully updated with new statistics to account for new developments in global financial institutions like the World Bank
WB The World Bank was founded as part of the new international monetary system set up at Bretton Woods in 1944. Its capital is provided by member states’ contributions and loans on the international money markets. It financed public and private projects in Third World and East European countries.
It consists of several closely associated institutions, among which :
1. The International Bank for Reconstruction and Development (IBRD, 180 members in 1997), which provides loans in productive sectors such as farming or energy ;
2. The International Development Association (IDA, 159 members in 1997), which provides less advanced countries with long-term loans (35-40 years) at very low interest (1%) ;
3. The International Finance Corporation (IFC), which provides both loan and equity finance for business ventures in developing countries.
As Third World Debt gets worse, the World Bank (along with the IMF) tends to adopt a macro-economic perspective. For instance, it enforces adjustment policies that are intended to balance heavily indebted countries’ payments. The World Bank advises those countries that have to undergo the IMF’s therapy on such matters as how to reduce budget deficits, round up savings, enduce foreign investors to settle within their borders, or free prices and exchange rates.
http://worldbank.org and IMF. Your Money or Your Life is widely considered one of the clearest and best-documented books on globalization available.
Includes an extensive bibliography and notes.
“Packed full of detail...This book is stimulating, concise, and well-written, with lots of examples and three country case studies. I highly recommend it.”
Wendy Olsen, Capital & Class
Eric Toussaint is president of the Committee for the Cancellation of Third World Debt and is a fellow and frequent lecturer at the International Institute for Research and Education in Amsterdam. He is the co-author of Who Owes Who? 50 Questions About World Debt.