Communist Web Wednesday 19th April 2000 9.30pm gmt International Monetary Fund on the ropes By Russell Mokhiber and Robert Weissman There may be no single institution with greater pernicious influence in the world than the International Monetary Fund (IMF). Now, for the first time, the Fund faces a real challenge to its existence, at least in its current form. For two decades, the IMF has exerted a stranglehold over developing country economies, denying them the funding they need to make foreign debt payments and avoid default, unless they enact "structural adjustment" policies. Structural adjustment can fairly be described as a virulent strain of Reaganomics or Newt Gingrich's Contract with America. The basic idea of these policies is to open countries' labor markets and natural resource riches to multinationals, shrink the size and role of government, rely on market forces to distribute resources and services and integrate poor countries into the global economy. Key structural adjustment policies include: privatizing government-owned enterprises and government-provided services, slashing government spending, orienting economies to promote exports, lifting trade restrictions, implementing higher interest rates, eliminating subsidies on consumer items such as foods, fuel and medicines and imposing tax increases. Structural adjustment has been successful at its intended effort to diminish the scope of government and integrate developing countries into the global economy. But it has increased suffering in developing countries immeasurably. In most of the world's poorest nations undergoing structural adjustment, poverty has increased, health care systems have collapsed and income inequality has skyrocketed. Developing countries that have done well in recent decades, primarily those in Asia, including China, have succeeded by violating central tenets of structural adjustment: they have maintained a strong government role in the economy, and they have protected certain parts of their economy. Not surprisingly, people in developing countries have protested strongly against IMF policies. Countries throughout the world have witnessed "IMF riots" following IMF-ordered lifting of price subsidies for goods such as bread and gasoline. But because the IMF derives it authority from rich countries, not the poor nations, it has been able to weather these outbursts. In the last two years, however, momentum against the IMF has grown in the rich countries, as well as in... http://www.billkath.demon.co.uk/cw/international/international.html
