 |
Al-Ahram Weekly On-line 5 - 11 October 2000 Issue No. 502 
|
||
Published in Cairo by AL-AHRAM established in 1875 |
|
||
|
Al-Ahram Weekly On-line 5 - 11 October 2000 Issue No. 502
|
||
| Published in Cairo by AL-AHRAM established in 1875 |
|
||
Egypt Elections Region International Economy Opinion Culture Focus Features Travel Living Sports Profile People Time Out Chronicles Cartoons Letters Raising the stakes
By Gamal Nkrumah
The menace of global capitalism cannot remain unchecked. In the Czech capital of Prague, where the International Monetary Fund (IMF) and the World Bank held their annual meeting, last week's anti-capitalist protests were indicative of international indignation at the abominable record of the two Bretton Woods institutions. The world's poorest countries spend $60 million a day on debt repayment and the continuation of this brutal repression, which is killing millions and ruining the lives of many more millions around the world -- especially in Africa -- is untenable.
"May this century be one where the poor and marginalised come into their own and the gross social inequalities of the past are at last eradicated," former South African President Nelson Mandela told delegates at the British Labour Party in Brighton last week. The desperately poor African countries for their part are doing their bit and especially because they are under tremendous pressure to perform. According to South African Finance Minister Trevor Manuel, who was in Prague for the IMF World Bank meeting, education and healthcare spending in Africa have increased 2.1 per cent a year in real per capita terms between 1985-98.
There are those like United States Treasury Secretary Lawrence Summers who want to see the IMF's role modified to facilitate "financial stability within countries, a stable flow of capital between them, and rapid recoveries following any financial disruptions."
Vows of piety by the thieving banks can no longer be considered as acceptable penance. All are agreed that the IMF and World Bank must not be permitted to continue muddling on. By its own admission, between 60 and 70 per cent of all World Bank-funded projects in Third World countries in the 1990s have either floundered or failed to get off the ground. There are many who argue that the two international financial institutions must be abolished altogether. And, that there must first be a reckoning with the past. According to the United Nations Development Programme, some 19,000 children die every day in Africa south of the Sahara because hard-earned hard currency reserves are allocated to debt repayment instead of on healthcare and social provision.
The international pressure group that advocates writing off poor countries' debts Jubilee 2000 released a report on the eve of the Prague IMF-World Bank meeting, Shadowy Figures, discloses that IMF staff "act as agents for the most powerful international creditors," invariably represented on the bank's board. The reports show how poor countries such as Ghana, which can barely afford to pay $7 per capita on health annually, are forced to transfer $560 million to the IMF a year. Poor countries spend precious resources on repaying debts owed to the IMF and World Bank.
If the industrially advanced countries, or G7, are seriously concerned about writing off poor countries' debts, then why don't they urge the Bretton Woods institutions to do so? After all, G7 nations control 45 and 44 per cent of the votes on the boards of the IMF and World Bank. "The miserly one-third cancellation currently on offer will still leave poor countries spending more on debt than on healthcare. The Bank and Fund can cancel 100 per cent of the poorest countries' debts, and their G7 puppet masters should let them do it," argued Anne Pettifor, director of Jubilee 2000 in Prague.
Even US Congressmen are outraged at the banks' abysmal record of "doling out money for poverty reduction without verifying that the money actually reduced poverty," as United States House Majority Leader Dick Armey aptly pointed out after reviewing the results of a investigation by the International Finance Institutional Advisory Commission -- also called the Meltzer Commission -- appointed by the US Congress to study the IMF and other lending agencies. A report recently released by the Meltzer Commission advocates closing down the IMF's concessional loan facility -- the Poverty Reduction and Growth Facility (PRGF). It called for the IMF to confine itself to very short-term emergency lending to emerging markets.
"The Commission has also highlighted a scandalous level of mismanagement at the World Bank. The world's poorest, not to mention the world's taxpayers, deserve better than that. The Commission has a plan to clean up the Bank and all who care about alleviating poverty need to have a good look at it," said Armey.
So the plan is to make Bretton Woods institutions, banks with a rescue mission? Apparently so. "No longer will the IMF offer overly ambitious schemes to redesign entire economies. No longer will it impose Herbert Hoover-style austerity plans on countries in trouble. No longer will the IMF bail out the bankrupt on the backs of the poor," added Armey. Hitherto, the IMF has been giving advice on macro-economic policies, now its economists must catch up by revising their models.
