IMF 'Structural Adjustment'

  • Between 1980 and 1992 the poorest countries in the world paid three times more
    to the IMF and the World Bank than their original debt.
  • The poor countries of sub-Saharan Africa owe more than 300 billion (US$4.5 billion) in debt,
    three times more than they can earn annually through exports.
  • The debt burden of IMF and World Bank loans kills 19,000 children every single day.

 

The International Monetary Fund


Go to top of this file Why and when

The IMF and the World Bank were set up in 1944, just as US capitalism was about to "win the war", to oversee the global economy in the interests of the richest people in the richest countries of the world, particularly the USA.

The IMF, democratic?

The USA accounts for 5% of the world's population but has 17% of votes in the IMF. The largest G7 industrial countries have 45% of IMF votes between them. Democracy? One person = one vote? Not in the IMF: free market policies to enslave most people on the planet and to line the pockets of multinational corporate shareholders is what counts ...

Go to top of this file What is 'Structural Adjustment'?

To qualify for an IMF or World Bank loan, poor countries must sign up to a "Structural Adjustment Programme". This means slashing public spending (health, education, etc.). It means dumping workers' rights, wages and conditions. It also means opening up sectors to foreign firms and driving local production our of business. Failure to structurally adjust leads to cancellation of the loan. Here are some examples of "Structural Adjustment".

Peru

In 1991, Peruvians faced the following price increases overnight, thanks to IMF measures: petrol went up by 3,000%, bread by 1,100% - too bad if you can't afford it!

Environment

IMF programmes cause deforestation in indebted nations. Goverments there try to generate cash to pay off IMF and World Bank loan interests by deforesting large areas. In 1998, thousands of deaths during Hurricane Mitch were directly due to mud slides in deforested areas. The IMF also forces farmers to produce a single crop for export as quickly as possible. This policy causes more pests and viruses, causing crop failure, causing.... etc., etc. (see Structural Adjustment Programmes).

Ethiopia, Tanzania, Zimbabwe

In Ethiopia debt repayments are four times greater than spending on health. In Tanzania, where 40% of the population dies before reaching 35, debt repayments are six times more than health spending. In Zimbabwe health spending has fallen by a third with "Structural Adjustment".

Human disease and mortality

IMF Structural Adjustment Programmes have led to a rise in infant mortality. Public hospitals and clinics in sub-Saharan Africa, as well as in parts of Latin America and Asia, have become breeding grounds for diseases like cholera, hepatitis and typhoid, which have made a comeback.

IMF imposed health cuts have ensured that AIDS and HIV infection has ravaged much of Africa.

Indonesia

After the 1997 Asian crisis, IMF Structural Adjustment was imposed on Indonesia. As a result 40 million extra people fell below the poverty line.


Go to top of this file The IMF assessed

IMF Structural Adjustment Programmes are supposed to lead to economic growth. Nonsense! According to a UN survey, of 76 nations implementing IMF Structural Adjustment Programmes, only four (5%) had actually improved their economic performance - and guess how that is assessed!

The real IMF

Today the 5 biggest multinationals, controlled by around 40 people, have a bigger output than the Middle East and Africa combined. These few individuals make decisions about what is produced in the world, who has jobs, and who lives and dies in poverty. Multinationals pour huge resources into ensuring that they decisively influence decisions in the IMF. They organise bodies like the World Water Council, which campaigns for privatisation around the world.

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