Last Updated : 03-09-2014 02:51


IMF, World Bank and future of Third World nations

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By Shenali Waduge
60 years after the IMF and the World Bank took on the onerous task to promote growth and to rebuild nations, why is it that half of the world of 7 billion people still live on less than a dollar a day, 3 billion have no access to sanitation, 2 billion have no access to electricity, 1.3 billion have no access to clean water, nearly 1 billion cannot read or sign their names, over 270 million are unemployed, while 1% controls the entire wealth of the world? If the IMF and the World Bank are owned and controlled by the Rothschild family together with 13 other banking families, is it not they who control the world and not governments and certainly not the people? Today, the developing world spends $13 on debt repayments for every $1 given as grants. How many noticed that all the countries that have seen regime change in the recent past were countries whose central banks did not belong to the international banking network? The strategy formulated as far back as 2001 was to ‘intervene’ in these nations and take over their banks – that’s how Libya, Sudan, Iraq, Afghanistan fell and why Cuba, North Korea, Syria and Iran remain the next targets.

Imbalance in resource distribution

The world’s financial situation is not healthy. It is clear that the distance between the rich and poor is expanding at alarming rates. How did 48 countries or a quarter of the world’s GDP combined wealth becomes less than the wealth of the world’s three richest countries? Why is it that 20% of developed nations consume 86% of the world’s goods? How is it that 85% of the world’s water is used by just 12% in the First World? Why is more than half the world’s 100 wealthiest bodies are corporations and not nations? How did a few wealthy millionaires make the combined wealth of 2.5 billion people? How did 700 million become obese, while 1.6 billion were overweight? By 2004, 0.13% of the world controlled 25% of the world’s assets. The money the US and the EU companies spend on entertainment can easily eliminate hunger, health issues, provide education and clean water to the entire world. Who is responsible for this imbalance and has the imbalance been created to sustain the wealth of a few through the formula of debt repayment? One of the main causes for the imbalance in distribution of resources in the world economy was colonialism. 84% of land was under European and North American control by 1900. There were only 35 independent countries. Today, there are 193 independent states but over half of them are impoverished. Whereas countries such as Singapore, Malaysia and South Korea have achieved levels of success despite their colonial legacy, the other nations are lagging far behind worsened by neocolonialism, where developed nations are using trade to tap into natural resources of the developing nations.

                               The IMF and the World Bank work hand in hand to give loans on conditions that have left nations taking loans and falling further into debt. Countries are unable to rise from poverty due to these ‘structural adjustments’ imposed on nations, taking loans to ensure debt repayment. How can the IMF and the World Bank raise the standard of living, when it lowers the standard of living by forcing governments to reduce spending on health, education, development and infrastructure? In 1980, the total debt of developing countries was US$ 567 billion. By 1992, these countries had to pay back US$ 1662 billion, while debt increased to US$ 1419 billion, due to high interest rates. These countries had no other option but to take fresh loans! Debt repayment denies US$ 160 billion each year from developing countries.

Poor to remain poor

The IMF and the World Bank insist on ‘liberalized’ economies, encouraging more export-oriented open markets with countries at a loss on how to cater to internal requirements. Insistence on privatization has led to the death of domestic industries, currencies becoming devalued, interest rates being increased, food subsidies eliminated and country regulations removed to attract foreign investors. The G20 nations comprising the US, the UK, Germany, France, Italy, Canada, Mexico, Japan, Russia, China, Brazil, Argentina, Australia, India, Indonesia, South Korea, Saudi Arabia, South Africa and Turkey account for 90% of the worlds’ gross product and over 80% of world trade. In addition, they control voting power in the IMF and the World Bank. Their vision for ‘sustained growth’ means their companies should be allowed to buy assets in any country and have a free hand to move money in and out of these countries they will invest in. The poorest 48 countries account for 0.4% global exports because their local industries have been destroyed by imports under ‘free’ trade, making 400 people the global elites, with more money than what 3 billion people own together.
                             Most politicians are quick to agree to privatize for it means selling of state bodies and gaining commissions. Thus, these structural adjustments encourage corruption and undermine democracy, as governments end up being accountable to these Western dominated banks, instead of their own people. Are these not facets of neoliberal ideology? The IMF and the World Bank formula rarely varies, which equates to mean that countries taking these loans are destined to remain poor. Visits by their representatives are nothing more than handing down a list of demands that forces ‘voluntary’ signature. Governments and their officials have no say.

Conditions for WB loans

Generally, there are around 67 conditions for a World Bank loan. Most IMF/World Bank agreements cover around 111 items that include bribing politicians for selling off key assets such as water, electricity, gas, etc. – all leaders who do not agree are overthrown. Argentina fell because its politicians sold the nation- its water system and pipeline running through Argentina and Chile was sold to Enron. Enron fell but not before assets were transferred. As a result of these forced ‘liberalization’ programmes, Africa lost 500,000 children, since African governments were forced to abolish price support on essential foods, reduce state spending on health, education and social services and increase taxes, which the people found impossible to pay. Can Africa ever recover? In Zambia, privatization has left over 60,000 jobless, increase in bus fares, closure of rural bus routes, making life difficult for Zambians. In Nigeria, kerosene has increased by 6000%, telecommunication by 5000% and electricity by 883%. Ghana has had to increase health and education services making both unaffordable for the poor. Uganda ended up privatizing government institutions reducing the size of the civil service and the army, cutting in government spending on social services, which led to loss of 170,000 state jobs, collapse of small enterprises and increase in school fees. Malawi removed fertilizer subsidies forcing farmers to purchase fertilizers and those who couldn’t sell their food stocks left Malawi’s food security in a crisis. According to Mozambique’s trade union federation OTM, of the 502 companies which were privatised since 1989, only 25% is still operational and 37,000 workers have been retrenched. Isn’t this the story in most countries?
                             The World Bank is funded by the US Treasury and the Federal Reserve that creates the monetary policy is a private concern owned by the Rothschilds to which Americans annually pay $300 billion in interest. The Rothshilds own all but four of the world’s central banks (Cuba, North Korea, Syria and Iran). Things are not rosy for the US either. Its economy is predicted to be taken over by China. The US was a country that supplied 50% of the world’s gross products in 1950. Today, it supplies less than 20%. In 1950, 60% of all manufactured goods were produced in the US. Today, the US manufactures less than 20%. All of the US retail stores sell items manufactured in China. Even ‘American’ items are those manufactured overseas! The US mortgage debt stood at $14.2 trillion. The US debt is $6 trillion!

Emerging from debt trap

America is a nation in debt – to whom, the Federal Reserve, which is owned by the Rothschilds, who incidentally owns international and local media agencies. Needless to say, too many countries are victims of forced debt, while money flows from these developing countries to developed countries, which is given back as loans with further interest and strings attached. These poor countries are borrowing their own money! Money did not come from another planet. Ideally, all the Third World debt should be erased on the grounds that these debts have been created fraudulently. As a first measure, the Third World nations need to get back to fundamentals.
                               Nationalizing of industries must take precedence devoid of vice and corruption and the successful management of these industries could over a period of time pay off debts, as well as increase the quality of living for their masses. The governments in particular must realize what areas within the local industries bore dividends and these should be nurtured with care and strategic planning. As for Sri Lanka in particular, we seem to have forgotten we were a nation that was called the ‘Granary of the East’. Why are we not respecting the nation for its agricultural status? Look how Australia takes care of its country to ensure that no harm comes to its agricultural products. Does Sri Lanka regulate its imports? Do we have controls over import items that may pose a health risk to consumers? We may not be able to come out of the debt trap immediately but all governments are duty-bound to protecting national assets and ensuring that people find avenues that could sustain their livelihoods from resources that belong to the nation, not doling these out to foreign interests.


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