Sunday, December 9, 2012

The Left and Right Hands - IMF and World Bank




            The International Monetary Fund’s main purpose is to set international currency rates which allow the movement of capital across nation-state government borders.  The International Monetary Fund also establishes loans, payable with the strongest world currencies and repaid with the lower valued national currencies of the borrowing nation-state, issued to economically overextended nation-states usually struggling from the ills of post-colonialism.  The World Bank’s main mission is to reconstruct post-colonial and war ravaged nation-state economies while claiming that these efforts are humanitarian in nature.  The World Bank Group opens up recipient nation-states to foreign capital and international capital investment (along with the exploitation of natural resources) into these technologically under-developed and poverty stricken nation-states.  The institutions of the IMF and the World Bank are like right and left hands when it comes to international capitalism and private sector investments and exploitation of lesser developed nation-state natural resources.

            Using the IMF’s Poverty Reduction Strategy in Bangladesh as an example of that organization’s true capitalistic private sector motives, it is important to note that Bangladesh is rich in crude oil, natural gas, minerals, fertile soils and abundant water supplies for agriculture.  Loans from the IMF, and the World Bank, granted to poverty stricken, technologically under-developed nation-states also come with strict conditions and those conditions open the infrastructure of the nation-state to foreign private sector exploitation on domestic natural resources, and Bangladesh is a perfect example because “just under one third of all of Bangladesh’s conditions within its second Development Support Credit granted for 2005 were privatization-related (18 out of 53)”.  This was the case in 2005 and nothing has changed in 2012 as the IMF’s joint staff has reported “that private enterprise should form the basis for sustainable growth and employment in Bangladesh.”

            The World Bank’s private capitalist exploitative goals are no different than the IMF, only more guised in humanitarian claims.  World Bank efforts at developing the Marsh Lands in Rwanda open up private investment and privatized industrial capitalist exploitation of Rwanda’s natural resources in agriculture, such as sugar cane, and is evident by the increase in Sugar cane production and exports since World Bank assistance flooded that nation-state with loan conditions and private investment capital.  The World Bank’s Economic Development and Poverty Reduction Strategy in Rwanda, launched in 2002, continues to operate in a manner of capitalist infiltration that “particularly supports the development of policies that facilitate increased private sector investment and involvement” and can be seen in the following strategy goals: “During the PRSF8-10 priority areas of support will be policy measures aimed at: (i) supporting the facilitation of trade and investments; (ii) increasing access to electricity and improved infrastructure services; (iii) raising private sector participation in the agricultural sector”

            The shrinking of the international economic system through globalization, led by the IMF and World Bank, is not a new stage of capitalist evolution, but a new phase of evolution in colonial exploitation as private international entities now conduct the capitalist exploitation of lesser developed nation-states behind the bright humanitarian flags waved by economic IGOs, instead of foreign nation-state governments as was the case during colonialism.  The old burdening expenses and political responsibilities of colonialism on nation-state governments have been brilliantly replaced by international private sector investments in order to exploit and rape natural resources in technologically under-developed nation-states in the name of capitalism and globalization. 

 

Bibliography

All Africa.  Press Release.  Rwanda: World Bank to Finance Private Sector Growth Policies in Country.  November 29, 2012.  (Accessed on December 9, 2012 from http://allafrica.com/stories/201112020627.html)

Index Mundi.  Bangladesh Crude Oil Production and Consumption by Year.  Accessed on December 9, 2012 from  http://www.indexmundi.com/energy.aspx?country=bd)

Index Mundi.  Rwanda Centrifugal Sugar Can Sugar Production by Year.  (Accessed on December 9, 2012 from http://www.indexmundi.com/agriculture/?country=rw&commodity=centrifugal-sugar&graph=cane-sugar-production)

World Bank and IMF Conditionality: A Development Injustice.  European Network on Debt and Development, June 2006.  (Accessed on December 9, 2012 from http://www.eurodad.org/uploadedfiles/whats_new/reports/eurodad_world_bank_and_imf_conditionality_report.pdf)

International Monetary Fund.  IMF Country Report No. 12.294.  Bangladesh: Poverty Reduction Strategy Paper––Joint Staff Advisory Note, October 2012.  (Accessed on December 9, 2012 from http://www.imf.org/external/pubs/ft/scr/2012/cr12294.pdf)
 

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