Re: Top Ten Reasons to Oppose the IMF

Sorry, the IMF was formed when?  
Should that be 1944?



the IMF?
The International Monetary Fund and the World Bank were created in 1994, 
shortly before the end of World War II, at a conference in Bretton Woods, 
New Hampshire.  Both institutions are now based in Washington, DC. The 
IMF was designed to promote international economic cooperation and 
provide its member countries with short term loans in order to trade with 
other countries (achieve balance of payments).  During the 1980's, the 
IMF took on an expanded role of lending money to "bailout" countries 
during financial crisis. This gave the IMF leverage to begin designing 
economic policies for over 60 countries.  Countries have to follow these 
policies to get the IMFís ìseal of approvalî to get loans, international 
assistance, and even debt relief.  Thus, the IMF has enormous influence 
not only in structuring the global economy, but also on real-life issues 
such as poverty, environmental sustainability and development.  The IMF 
is one of the most powerful institutions on Earth ñ yet few know what it 
is.  
 

TOP TEN REASONS TO OPPOSE THE IMF


1) The IMF has created a system of modern day colonialism that SAPs the 
poor to fatten the rich

The IMF, along with the WTO and the World Bank, is directing the global 
economy on a path of greater inequality and environmental destruction. 
The IMF's and World Bank's "structural adjustment policies" (SAPs) ensure 
debt repayment by requiring countries to cut spending on education and 
health; eliminate basic foods and transportation subsidies; devalue 
national currencies to make exports cheaper; privatize national assets; 
and freeze wages.  These policies increase poverty, reduce countriesí 
ability to develop strong domestic economies and allow multinational 
corporations to exploit workers and pollute the environment. 

2) The IMF caters to wealthy countries and Wall Street 

Although industrialized countries have not borrowed from the IMF in 
twenty years, rich countries dominate decision making. Voting power is 
determined by the amount of money that each country pays.  The U.S. is 
the largest shareholder with a quota of 18%.  U.S., Germany, Japan, 
France and Great Britain together hold about 38% of the vote.  Each of 
these countries appoints their own representative to the executive board, 
while other groups of countries elect a representative.  The U.S. 
Executive Director is Karin Lissakers, and she works closely with 
Lawrence Summers and the U.S. Treasury Department to design policy for 
the IMF.  The disproportional amount of power held by wealthy countries 
translates into decisions that benefit wealthy bankers, investors and 
corporations from industrialized countries at the expense of sustainable 
development. Is it a surprise that the IMF then uses its leverage over 
cash-strapped developing countries to force them to open up to powerful 
transnational corporations?




3) The IMF is imposing a fundamentally flawed development model

Unlike the path followed by most industrialized countries, the IMF forces 
countries from the Global South to prioritize export production over the 
development of a diversified domestic economy. ÝNearly 80% of all 
malnourished children in the developing world live in countries where 
farmers have been forced to shift from food production for local 
consumption to the production of crops for export to the industrialized 
countries. ÝThe IMF also requires countries to eliminate tariffs and 
provide incentives for multinational corporations ñ such as reduced labor 
and environmental protections. ÝSmall businesses and farmers canít 
compete with large multinational corporations, resulting in sweatshop 
conditions where workers are paid starvation wages, live in inhumane 
conditions, and are unable to provide for their families. ÝThe cycle of 
poverty is perpetuated, not eliminated. Ý

4) The IMF is a secretive institution with no accountability

The IMF is funded with taxpayer money, yet it operates from behind a veil 
of secrecy. For the most part, members of affected communities do not 
participate in designing loan packages.  The IMF works with a select 
group of central bankers and finance ministry staff to decide polices 
without input from other government agencies such as health, education 
and environment departments.  Furthermore, the IMF has resisted attempts 
to open up to public scrutiny and independent evaluation.  The IMF has 
made elites from the Global South more accountable to First World elites 
than their own people.

5) IMF policies promote corporate welfare

To increase exports, countries are encouraged to give tax breaks and 
subsidies to export industries. Assets such as forestland and government 
utilities (phone, water and electricity companies) are sold off to 
foreign investors at rock bottom prices. Some examples: In Guyana, an 
Asian owned timber company called Barama received a logging concession 
that was 1.5 times the total amount of land all the indigenous 
communities were granted.  Barama also received a five-year tax holiday. 
The IMF forced Haiti to open its market to imported, highly subsidized 
U.S. rice at the same time it prohibited Haiti from subsidizing its own 
farmers. A US corporation called Early Rice now sells nearly 50% of the 
rice consumed in Haiti.   Haitian farmers have been forced off their land 
to seek work in sweatshops, and people are poorer than ever.

6) The IMF hurts workers 

Many SAPs require changes in labor laws, such as eliminating collective 
bargaining laws and lowering wages in order to provide conditions 
favorable to attracting foreign investors. The IMF's mantra of "labor 
flexibility" permits corporations to fire at whim and move where wages 
are cheapest.  According to the 1995 UN Trade and Development Report, 
employers are using this extra "flexibility" in labor laws to shed 
workers, rather than create jobs. In Haiti, the government was told to 
eliminate a statute in their labor code that mandated increases in the 
minimum wage when inflation exceeded 10%.  By the end of 1997, Haiti's 
minimum wage was only $2.40 a day, just one-fifth of the minimum wage in 
1971 in real terms. Workers in the U.S. are also hurt by IMF policies by 
having to compete with cheap, exploited labor.  Two years ago, the IMFís 
mismanagement of the Asian financial crisis plunged South Korea, 
Indonesia, Thailand and other countries into deep depression that led to 
the creation of 200 million "newly poor."  The IMF advised countries to 
"export their way out of the crisis."  Consequently, the dumping of Asian 
steel in U.S. markets resulted in the layoffs of over 12,000 steelworkers.
 
7) The IMF's policies hurt women the most 

SAPs make it much more difficult for women to meet their familiesí basic 
needs.  When education costs rise due to user fees, girls are the first 
to be withdrawn from schools.  User fees in public health facilities make 
it unaffordable to those who need it most.  The shift to export 
agriculture also makes feeding one's family increasingly difficult. Women 
have also become more exploited in the private sector workforce as 
regulations are rolled back and sweatshops abound.  The general lack of 
economic opportunity has meant an increase in prostitution and other 
black market jobs and indentured servitude.

8) IMF Policies hurt the environment

IMF loans and bailout packages are paving the way for natural resource 
exploitation on a staggering scale.  The IMF does not consider 
environmental impacts of lending policies; and environmental ministries 
and groups are not included in policy making.  The focus on export growth 
to earn hard currency to pay back loans means unsustainable liquidation 
of natural resources.  Government cutbacks inevitably target the 
environmental ministry as one of the first agencies to come under the 
budget axe. This happened with the bailouts of Brazil, Indonesia, and 
Russiaócountries that are renowned for their great biodiversity.

9) The IMF bails out rich bankers, creating a moral hazard and greater 
instability in the global economy

The IMF pushes countries to dismantle trade and investment rules, as well 
as raise interest rates in order to lower inflation. The removal of 
regulations that might limit speculation has greatly increased capital 
investment in developing country financial markets. More than $1.5 
trillion crosses borders every day. This capital is short-term, unstable, 
and puts countries at the whim of financial speculators. The Mexican 1995 
peso crisis was partly a result of these IMF policies. When the bubble 
popped, the IMF and US government stepped in to prop up interest and 
exchange rates, using taxpayer money to bailout Wall Street bankers for 
their high-risk investment. This encourages investors to continue making 
risky, speculative bets, increasing the instability of national 
economies. Furthermore, during the bailout of Asian countries, the IMF 
restored rich peopleís profits while implementing policies that threw 
people out of work and increased poverty.  Asian governments were 
required to assume the bad debts of private banks, thus making the public 
pay the costs and draining yet more resources away from social programs 
and real development.

10) IMF bailouts deepen, rather then solve, economic crisis. 

During financial crises, such as with Mexico in 1995 and South Korea, 
Indonesia, Thailand, Brazil, and Russia in 1997, the IMF stepped in as 
the lender of last resort to "bail out" countries with huge loan 
packages. Yet the IMF bailouts in the Asian financial crisis did not stop 
the financial panicóinstead, the crisis deepened and spread to more 
countries.  The policies imposed as conditions of these loans were bad 
medicine, causing layoffs in the short run and undermining development in 
the long run. In South Korea, the IMF sparked a recession by raising 
interest rates and lowering the currency, resulting in more bankruptcies, 
increased unemployment, and government spending cuts. Under the 
IMF-imposed economic reforms after the peso bailout in 1995, the number 
of Mexicans living in extreme poverty increased more than 50% and the 
national average minimum wage fell 20%.

For more info check: HYPERLINK http://www.globalexchange.org 

www.globalexchange.org,  HYPERLINK http://www.50years.org 

www.50years.org, or  HYPERLINK http://www.A16.org 
www.A16.org  
HYPERLINK mailto:Juliette@globalexchange.org 

Juliette@globalexchange.org, 415-558-9486x254


the IMF?
The International Monetary Fund and the World Bank were created in 1994, 
shortly before the end of World War II, at a conference in Bretton Woods, 
New Hampshire.  Both institutions are now based in Washington, DC. The 
IMF was designed to promote international economic cooperation and 
provide its member countries with short term loans in order to trade with 
other countries (achieve balance of payments).  During the 1980's, the 
IMF took on an expanded role of lending money to "bailout" countries 
during financial crisis. This gave the IMF leverage to begin designing 
economic policies for over 60 countries.  Countries have to follow these 
policies to get the IMFís ìseal of approvalî to get loans, international 
assistance, and even debt relief.  Thus, the IMF has enormous influence 
not only in structuring the global economy, but also on real-life issues 
such as poverty, environmental sustainability and development.  The IMF 
is one of the most powerful institutions on Earth ñ yet few know what it 
is.  
 

TOP TEN REASONS TO OPPOSE THE IMF


1) The IMF has created a system of modern day colonialism that SAPs the 
poor to fatten the rich

The IMF, along with the WTO and the World Bank, is directing the global 
economy on a path of greater inequality and environmental destruction. 
The IMF's and World Bank's "structural adjustment policies" (SAPs) ensure 
debt repayment by requiring countries to cut spending on education and 
health; eliminate basic foods and transportation subsidies; devalue 
national currencies to make exports cheaper; privatize national assets; 
and freeze wages.  These policies increase poverty, reduce countriesí 
ability to develop strong domestic economies and allow multinational 
corporations to exploit workers and pollute the environment. 

2) The IMF caters to wealthy countries and Wall Street 

Although industrialized countries have not borrowed from the IMF in 
twenty years, rich countries dominate decision making. Voting power is 
determined by the amount of money that each country pays.  The U.S. is 
the largest shareholder with a quota of 18%.  U.S., Germany, Japan, 
France and Great Britain together hold about 38% of the vote.  Each of 
these countries appoints their own representative to the executive board, 
while other groups of countries elect a representative.  The U.S. 
Executive Director is Karin Lissakers, and she works closely with 
Lawrence Summers and the U.S. Treasury Department to design policy for 
the IMF.  The disproportional amount of power held by wealthy countries 
translates into decisions that benefit wealthy bankers, investors and 
corporations from industrialized countries at the expense of sustainable 
development. Is it a surprise that the IMF then uses its leverage over 
cash-strapped developing countries to force them to open up to powerful 
transnational corporations?




3) The IMF is imposing a fundamentally flawed development model

Unlike the path followed by most industrialized countries, the IMF forces 
countries from the Global South to prioritize export production over the 
development of a diversified domestic economy. ÝNearly 80% of all 
malnourished children in the developing world live in countries where 
farmers have been forced to shift from food production for local 
consumption to the production of crops for export to the industrialized 
countries. ÝThe IMF also requires countries to eliminate tariffs and 
provide incentives for multinational corporations ñ such as reduced labor 
and environmental protections. ÝSmall businesses and farmers canít 
compete with large multinational corporations, resulting in sweatshop 
conditions where workers are paid starvation wages, live in inhumane 
conditions, and are unable to provide for their families. ÝThe cycle of 
poverty is perpetuated, not eliminated. Ý

4) The IMF is a secretive institution with no accountability

The IMF is funded with taxpayer money, yet it operates from behind a veil 
of secrecy. For the most part, members of affected communities do not 
participate in designing loan packages.  The IMF works with a select 
group of central bankers and finance ministry staff to decide polices 
without input from other government agencies such as health, education 
and environment departments.  Furthermore, the IMF has resisted attempts 
to open up to public scrutiny and independent evaluation.  The IMF has 
made elites from the Global South more accountable to First World elites 
than their own people.

5) IMF policies promote corporate welfare

To increase exports, countries are encouraged to give tax breaks and 
subsidies to export industries. Assets such as forestland and government 
utilities (phone, water and electricity companies) are sold off to 
foreign investors at rock bottom prices. Some examples: In Guyana, an 
Asian owned timber company called Barama received a logging concession 
that was 1.5 times the total amount of land all the indigenous 
communities were granted.  Barama also received a five-year tax holiday. 
The IMF forced Haiti to open its market to imported, highly subsidized 
U.S. rice at the same time it prohibited Haiti from subsidizing its own 
farmers. A US corporation called Early Rice now sells nearly 50% of the 
rice consumed in Haiti.   Haitian farmers have been forced off their land 
to seek work in sweatshops, and people are poorer than ever.

6) The IMF hurts workers 

Many SAPs require changes in labor laws, such as eliminating collective 
bargaining laws and lowering wages in order to provide conditions 
favorable to attracting foreign investors. The IMF's mantra of "labor 
flexibility" permits corporations to fire at whim and move where wages 
are cheapest.  According to the 1995 UN Trade and Development Report, 
employers are using this extra "flexibility" in labor laws to shed 
workers, rather than create jobs. In Haiti, the government was told to 
eliminate a statute in their labor code that mandated increases in the 
minimum wage when inflation exceeded 10%.  By the end of 1997, Haiti's 
minimum wage was only $2.40 a day, just one-fifth of the minimum wage in 
1971 in real terms. Workers in the U.S. are also hurt by IMF policies by 
having to compete with cheap, exploited labor.  Two years ago, the IMFís 
mismanagement of the Asian financial crisis plunged South Korea, 
Indonesia, Thailand and other countries into deep depression that led to 
the creation of 200 million "newly poor."  The IMF advised countries to 
"export their way out of the crisis."  Consequently, the dumping of Asian 
steel in U.S. markets resulted in the layoffs of over 12,000 steelworkers.
 
7) The IMF's policies hurt women the most 

SAPs make it much more difficult for women to meet their familiesí basic 
needs.  When education costs rise due to user fees, girls are the first 
to be withdrawn from schools.  User fees in public health facilities make 
it unaffordable to those who need it most.  The shift to export 
agriculture also makes feeding one's family increasingly difficult. Women 
have also become more exploited in the private sector workforce as 
regulations are rolled back and sweatshops abound.  The general lack of 
economic opportunity has meant an increase in prostitution and other 
black market jobs and indentured servitude.

8) IMF Policies hurt the environment

IMF loans and bailout packages are paving the way for natural resource 
exploitation on a staggering scale.  The IMF does not consider 
environmental impacts of lending policies; and environmental ministries 
and groups are not included in policy making.  The focus on export growth 
to earn hard currency to pay back loans means unsustainable liquidation 
of natural resources.  Government cutbacks inevitably target the 
environmental ministry as one of the first agencies to come under the 
budget axe. This happened with the bailouts of Brazil, Indonesia, and 
Russiaócountries that are renowned for their great biodiversity.

9) The IMF bails out rich bankers, creating a moral hazard and greater 
instability in the global economy

The IMF pushes countries to dismantle trade and investment rules, as well 
as raise interest rates in order to lower inflation. The removal of 
regulations that might limit speculation has greatly increased capital 
investment in developing country financial markets. More than $1.5 
trillion crosses borders every day. This capital is short-term, unstable, 
and puts countries at the whim of financial speculators. The Mexican 1995 
peso crisis was partly a result of these IMF policies. When the bubble 
popped, the IMF and US government stepped in to prop up interest and 
exchange rates, using taxpayer money to bailout Wall Street bankers for 
their high-risk investment. This encourages investors to continue making 
risky, speculative bets, increasing the instability of national 
economies. Furthermore, during the bailout of Asian countries, the IMF 
restored rich peopleís profits while implementing policies that threw 
people out of work and increased poverty.  Asian governments were 
required to assume the bad debts of private banks, thus making the public 
pay the costs and draining yet more resources away from social programs 
and real development.

10) IMF bailouts deepen, rather then solve, economic crisis. 

During financial crises, such as with Mexico in 1995 and South Korea, 
Indonesia, Thailand, Brazil, and Russia in 1997, the IMF stepped in as 
the lender of last resort to "bail out" countries with huge loan 
packages. Yet the IMF bailouts in the Asian financial crisis did not stop 
the financial panicóinstead, the crisis deepened and spread to more 
countries.  The policies imposed as conditions of these loans were bad 
medicine, causing layoffs in the short run and undermining development in 
the long run. In South Korea, the IMF sparked a recession by raising 
interest rates and lowering the currency, resulting in more bankruptcies, 
increased unemployment, and government spending cuts. Under the 
IMF-imposed economic reforms after the peso bailout in 1995, the number 
of Mexicans living in extreme poverty increased more than 50% and the 
national average minimum wage fell 20%.

For more info check: HYPERLINK http://www.globalexchange.org 

www.globalexchange.org,  HYPERLINK http://www.50years.org 

www.50years.org, or  HYPERLINK http://www.A16.org 
www.A16.org  
HYPERLINK mailto:Juliette@globalexchange.org 

Juliette@globalexchange.org, 415-558-9486x254


********************************
Carina A. Bandhauer
Doctoral Candidate
Department of Sociology
Binghamton University
State University of New York
Binghamton NY  13902-6000

Office:    (607) 777-6337 (no message)
VoiceMail: (607) 777-2203
Fax:       (607) 777-4197
Email:     br00162@binghamton.edu
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