IMF, World Bank Why are these called "Evil"?

[Timber Loftis]

I love the posts on this forum by people who don't know what they're talking about. Not so much because I like reading drivel, but because it lets me keep a tab on the man-on-the-street opinion.

To spell it out:
1. IMF and WB were created (In an historic summit in Brenton Woods, NH) to loan money to countries in trouble. Why? Cause at that time, the same time that the General Agreement on Tarrifs and Trade (GATT) that later became the WTO was being designed, the world was really realizing that economic booms and busts in other countries affect every country - We are all inter-dependent to some degree economically. The World Bank is, technically, the IBRD (Intn'l Band for ? and Development, I think).

2. But, IMF and WB, to put it simply, require that a country have good economic policy so they can be assured the loan will get paid back.

3. Since IMF and WB are in Washington and are run by the First World (which are the basically only countries to contribute money to the funds), the requirement to "be good" economically translates to "do what we say and look like us."

4. Countries, while willing to take a loan and do a lot to guarantee that loan, generally like to have some control of their own economic policy - go figure . The feel squished by the first-world demands. Plus, it's not easy for them to always look like us - their situation is different. As a quick example, they can't do a lot in the way of workers rights because their workers suffer at the hands of OUR industries who went there for dirt-cheap labor (which is an economic phenomenon that I'm not objecting to). I know that's not an economic example, which I should use in this discussion, since most WB/IMF requirements involve fiscal policy. Also, an open election (to get the politician we want in office) is often called for - not exactly part of the IMF/WB purview, but the loan won't issue until the administrations of the first world countries (basically, the US, the biggest contributor to the fund) agree to it.

Sometimes we ask these countries to do things we can't even do - like use a monetary standard. USA went from gold standard to silver standard, and then that was removed. In truth, your USA dollar today is not backed by any stash of gold in Ft. Knox, and is in fact only worth what people around the world believe it's worth. Nevertheless, we required Argentina to use a Dollar standard (i.e. they could not print more money than they had dollars in the bank) when we bailed them out. Silly. It made the Argentine peso strong for a long time (when I was there it was worth 98 cents) but we've seen it come crashing this last year.

5. Finally, and especially in 2002, who the F**K is the USA to be telling someone how to run an election or police corporate behavior.

HTH with a general understanding of what others view as the problems. I won't sign off as agreeing with all of this, so don't flame me for presenting what I understand to be the devil's advocate point of view.

[badet]

I apologise in advance for my bad english, it would be alot easier to respond to the question in Swedish.

First of all, banks are more or less chaotic neutral
The reason why the world bank is chaotic evil is because it capitalizes on poor countrues poverty. In the beginning there was colonist that forced a foul exploiting market on the small countries in the south, then when their economy crashed because of exploatation by large companies like Texaco, the would have to borrow money, they did this because they had no other choise. The world bank today is still getting intrest(probably the wrong word, sry) back from these countries,all of these countries have payd back on the loan 3-4 times, they can never afford to pay back all of the money at once, and the debts are just rising all the times. Its like stealing your car, and then loan u money for a bad car, that have to be repaired all the time, for this you have to loan even more money from me, and my intrest rate is skyhigh, so your trapped in a loann trap for the rest of your life. and all along it I who stole the car from u in the first place.

[DraconisRex]

Part of it is the inevitible reaction of people to the continuing problem of the United States and other first world countries acting in a colonial manner.
Part of it is the buried racism that first world countries have toward the people of third world countries. Part of it is just as Enron executives exploited investors, the first world has, by and large, exploited the third world. Disclaimer: All of these are more complicated than the synoptic over-view I presented.

The large part is the 1st world put tons of pressure on 3rd world countries to do things like deliever 1st world medical services, adopt 1st world farming practices, etc., etc. Unfortunatly, these practices were NOT economically viable in these countries.

Then, these countries, after running up all this debt on first world medical equipment, first world farming equipment, etc. were slapped across the back of the hand. Now, they are forced to close the hospitals. Deny social services. Abandon the land that was ruined by first world (situationally defective) farming practices, etc.

So, yeah, they're mad. So, yeah, some idiots from first world countries over-do-it and want to "shut cities" down. What else is new?

In the end, you have two diametrically opposed lunatic factions. The World Bank and the Protesters. But one side is accorded respectibility and has all the power. The other side has only one weapon: emotion.

What is dangerous is when those factions end up on the same side. Then we have the HIV/AIDS fiasco.

Originally posted by Timber Loftis: I love the posts on this forum by people who don't know what they're talking about. Not so much because I like reading drivel, but because it lets me keep a tab on the man-on-the-street opinion. Uhhh your first paragraph reads like a very nasty insult. I asked a question, hoping to get some answers. I hope that you don't equate the search for information as drivel. To spell it out: 1. IMF and WB were created (In an historic summit in Brenton Woods, NH) to loan money to countries in trouble. Why? Cause at that time, the same time that the General Agreement on Tarrifs and Trade (GATT) that later became the WTO was being designed, the world was really realizing that economic booms and busts in other countries affect every country - We are all inter-dependent to some degree economically. The World Bank is, technically, the IBRD (Intn'l Band for ? and Development, I think). Ok sounds like good historical info. 2. But, IMF and WB, to put it simply, require that a country have good economic policy so they can be assured the loan will get paid back. Sounds reasonabl;e since they do want a return on their investment. Doesn't sound so horrible to me....just fair 3. Since IMF and WB are in Washington and are run by the First World (which are the basically only countries to contribute money to the funds), the requirement to "be good" economically translates to "do what we say and look like us." You basicly said this in #2 only this time it sounds like you despise the idea of trying to encourage sound economic policy 4. Countries, while willing to take a loan and do a lot to guarantee that loan, generally like to have some control of their own economic policy - go figure . The feel squished by the first-world demands. Plus, it's not easy for them to always look like us - their situation is different. As a quick example, they can't do a lot in the way of workers rights because their workers suffer at the hands of OUR industries who went there for dirt-cheap labor (which is an economic phenomenon that I'm not objecting to). I know that's not an economic example, which I should use in this discussion, since most WB/IMF requirements involve fiscal policy. Also, an open election (to get the politician we want in office) is often called for - not exactly part of the IMF/WB purview, but the loan won't issue until the administrations of the first world countries (basically, the US, the biggest contributor to the fund) agree to it. Sometimes we ask these countries to do things we can't even do - like use a monetary standard. USA went from gold standard to silver standard, and then that was removed. In truth, your USA dollar today is not backed by any stash of gold in Ft. Knox, and is in fact only worth what people around the world believe it's worth. Nevertheless, we required Argentina to use a Dollar standard (i.e. they could not print more money than they had dollars in the bank) when we bailed them out. Silly. It made the Argentine peso strong for a long time (when I was there it was worth 98 cents) but we've seen it come crashing this last year. According to my economics professor, it is a good thing that we are not trying to base our economy off a monetary standard. Without this modern economic convention we would be forever limited in our financial scope...by becoming a "virtual" economy we are more flexible and more able to adapt to changing market forces. Do you realize there isn't enough gold in all the world to actually cover the commerce of the world? You know our ancestors used to use salt as a monetary standard...should we not have evolved a system away from that? Since it is a vital resource for human life and all. It just sounds to me like the people with the worst economies are being advised by people with better ones. 5. Finally, and especially in 2002, who the F**K is the USA to be telling someone how to run an election or police corporate behavior. Umm this isn't about the USA the World Bank and the IMF are international organizations and have international backing.....the answer to your question is "The Lender sets the terms, you don't like them, then tell them to tak a hike." No one is sending armed troops to thos countries and saying "Take this loan or you will be shot". HTH with a general understanding of what others view as the problems. I won't sign off as agreeing with all of this, so don't flame me for presenting what I understand to be the devil's advocate point of view. And Im still no nearer to knowing where these idiots who are boloxing up our traffic patterns and forcing their problems on the rest of us get off saying that the IMF and WTO is/are EVIL. I have seen no evidence that they are being unreasonable in their business dealings or where they are cheating on the terms of their deals....the wait continues,

Originally posted by badet: I apologise in advance for my bad english, it would be alot easier to respond to the question in Swedish. First of all, banks are more or less chaotic neutral The reason why the world bank is chaotic evil is because it capitalizes on poor countrues poverty. In the beginning there was colonist that forced a foul exploiting market on the small countries in the south, then when their economy crashed because of exploatation by large companies like Texaco, the would have to borrow money, they did this because they had no other choise. The world bank today is still getting intrest(probably the wrong word, sry) back from these countries,all of these countries have payd back on the loan 3-4 times, they can never afford to pay back all of the money at once, and the debts are just rising all the times. Its like stealing your car, and then loan u money for a bad car, that have to be repaired all the time, for this you have to loan even more money from me, and my intrest rate is skyhigh, so your trapped in a loann trap for the rest of your life. and all along it I who stole the car from u in the first place.

Your english is fine...your logic...in my opinion [img]smile.gif[/img] is flawed. You say they have no choice...but they do have a choice...they can say No. you always have choices....they choose to say yes...the thing about choice is....people want to make them...but not accept the consequences of those choices. To quote: "The choices you make, dictate the life you lead, to thine ownself be true.". Anyway thanks for trying to help me understand the other side [img]smile.gif[/img]

Originally posted by DraconisRex: Part of it is the inevitible reaction of people to the continuing problem of the United States and other first world countries acting in a colonial manner. Part of it is the buried racism that first world countries have toward the people of third world countries. Part of it is just as Enron executives exploited investors, the first world has, by and large, exploited the third world. Disclaimer: All of these are more complicated than the synoptic over-view I presented. Ummm Lets see, the USA hasn't made any colonies anywhere recently...the Oil resources in the middle east were all Nationalized by those nations (they took them back from the US oil companies that paid for the right to exploit them) and formed OPEC and now sell the oil at their pleasure to companies like Texaco etc. I think that part is actually pretty simple. Why do people complain about companies getting rich reselling the oil the arabs sell to them but no one bitches at the Princes, Sultans, Ayatolahs etc who reap untold billions and yet still allow their people to suffer through poverty?....aside fromt the fact that you can be shot for protesting their rule that is .. The large part is the 1st world put tons of pressure on 3rd world countries to do things like deliever 1st world medical services, adopt 1st world farming practices, etc., etc. Unfortunatly, these practices were NOT economically viable in these countries. Im not aware of these "requirements" but do see my comment about the billionaire princes above...I do know that several hundred american organizations donate for free many millions of dollars worth of the things you just mentioned..My sister an RN has made several trips to Africa and central America to provide free medical care to the poorest of people in the developing countries Then, these countries, after running up all this debt on first world medical equipment, first world farming equipment, etc. were slapped across the back of the hand. Now, they are forced to close the hospitals. Deny social services. Abandon the land that was ruined by first world (situationally defective) farming practices, etc. So, yeah, they're mad. So, yeah, some idiots from first world countries over-do-it and want to "shut cities" down. What else is new? I see what you are getting at here, I just think it is not what is actually happening. The people running the governments who are taking out loans from the IMF and World Bank are not ignorant savages, they are educated human beings...usually In the end, you have two diametrically opposed lunatic factions. The World Bank and the Protesters. But one side is accorded respectibility and has all the power. The other side has only one weapon: emotion. What is dangerous is when those factions end up on the same side. Then we have the HIV/AIDS fiasco. Which HIV/AIDS fiasco? The one where men are rabing babies because some rumor says that sex with unsullied virgins will cure the curse? Or the one where the WHO feels morally justified lying about HIV/AIDS figures because AIDS gets more donations to treat illness than does say..dysentary, cholera or a host of other diseases that while bad, just can't be used to scare money out of people? There is no hostility in my writing Im just not good at word play, I use sarcasm a bit too freely too...but I hope I got my messages accross

[Timber Loftis]

No intent at insult, Magik. These are crazily complex issues that I've studied a lot, so my point was that sometimes the academia background I come at these issues from, plus the fact I've worked on WTO issues in-depth a lot, make me out-of-touch with the point of view taken by most folks.

The problem with the lender setting the terms is an "evil" of sorts here. We're not talking about a bank saying "these are the terms or you get no loan." We're talking about an International organization that is supposed to be run by all countries according to a TREATY. So, the WB and IMF should not be able to dictate these things carte blanche, as they've got a set of rules to work by that most banks don't.

This leads me to discussing your notion that you want a reasonable return on your investment. Well, firstly these funds were created moreso to bail out countries in trouble than to make a buck, making their obsession with getting the money back a bit disingenuine from the original intended purpose. Moreover, one can run an economy effectively (thus guaranteeing the loan) without running it like the U.S. does. China is a fine example, because they are on the opposite end of the spectrum (socialist). However, even among first world nations there are some rather striking differences. Lester Thurow, a Harvard economist, wrote a book about this in the early 1990s where he broke the first world down into 3 basic economic zones based on how they run their economic policies. The zones were North America, EU, and Pacific Rim. In Pacific Rim countries, he found more "communistic" market practices (a term which would have been a paradox a generation ago), meaning he found more instances of the fiscal policy of the government being intertwined with businesses. The Japanese government for instance will make direct loans to companies - a true rarity in the US, where we generally don't like to see the government give money to industries (though the tax code is certainly a way to do this through the back door). Thus, guaranteeing return on a loan does not mean they should necessarily change their policies to be like us.

As for this being an international agency and the U.S. being unable to dictate the terms of the loans, I agree with you in principle but that is not the reality. The U.S. primarily has the reins of these agencies (and it does, I'll note again, put in the most $$$).

Your economics professor was right. My point was why should we require another country to undertake a practice we have evolved past?

The one thing you will see over and over again that everyone agrees on is that the best summation of the angst over these agencies is their Parental attitude.

[Timber Loftis]

qb][/QUOTE]Your english is fine...your logic...in my opinion [img]smile.gif[/img] is flawed. You say they have no choice...but they do have a choice...they can say No. you always have choices....they choose to say yes...the thing about choice is....people want to make them...but not accept the consequences of those choices. To quote: "The choices you make, dictate the life you lead, to thine ownself be true.". Anyway thanks for trying to help me understand the other side [img]smile.gif[/img] [/QB][/QUOTE]

I don't think it's that easy to say no. A country in trouble has no choice but to take an IMF loan. Chief among the reasons why is that first world businesses don't want to deal with them if they don't. And, first world money flow is a must. The reason why the first world companies stay out is that, as you may well be aware, when the economy tanks or a war (economic instability undoubtedly can beget war) breaks out, not only may any capital (equipment, buildings, and $$) in the country get stolen or vandalized, but the regime in control of the country may nationalize the capital (i.e. say "now it belongs to the country") or prevent it from being removed from the country. A loan relationship with the first world keeps their ties to the first world open and really helps prevent this from happening.

[norompanlasolas]

coming from argentina, i have to say it is a perfect example of a country badly managed, but also where the imf and world bank policies have been completely wrong. they have basically sunk down the country instead of promoting recovery.

right now, argentina is in "default" which means it is not paying its creditors and gets no more credit. so it is being sanctioned and penalized by the imf. but guess what? it received a credit from the imf to pay for the interests of a credit owed to... you got it! the imf!!! it sounds kafkian but it is so. the penalty for not taking said credit would be that it would be unable to pay for the other credit to the imf, and becoming in default with it, thus getting more sanctions. it is a vicious circle from the no less vicious imf officials.

defending the imf is pretty darn well impossible. you have to be pretty cynical to do it (it is not defended by... well, anyone that is not working there). they are basically the iron glove of capitalism and it is ruled by the interests of their own greed. and they are not even doing a good job. their "recepies" for improving 3º world economies have failed miserably (admitted by even them) and their ineptitude is legendary. id add more and put examples but there are so many of them id probably fill 3 pages with writing.

[ 09-26-2002, 05:57 PM: Message edited by: norompanlasolas ]

[DraconisRex]

[QUOTE]Originally posted by MagiK:
[QB][QUOTE]Originally posted by DraconisRex:
[qb]Part of it is the inevitible reaction of people to the continuing problem of the United States and other first world countries acting in a colonial manner.
Part of it is the buried racism that first world countries have toward the people of third world countries. Part of it is just as Enron executives exploited investors, the first world has, by and large, exploited the third world. Disclaimer: All of these are more complicated than the synoptic over-view I presented.

Ummm Lets see, the USA hasn't made any colonies anywhere recently...the Oil resources in the middle east were all Nationalized by those nations (they took them back from the US oil companies that paid for the right to exploit them) and formed OPEC and now sell the oil at their pleasure to companies like Texaco etc. I think that part is actually pretty simple. Why do people complain about companies getting rich reselling the oil the arabs sell to them but no one bitches at the Princes, Sultans, Ayatolahs etc who reap untold billions and yet still allow their people to suffer through poverty?....aside fromt the fact that you can be shot for protesting their rule that is ..

No. Not making colonies. Acting in a colonial manner. That is - you do what we say because we're superior and you're inferior. Look at AIDS:

Mbeki, a very well educated and very well spoken man, says: "You people are ignoring your best scientists and destroying their careers when they don't agree with your HIV=AIDS hypothesis. Your best scientists, even those that believe HIV=AIDS, proved conclusively that AZT doesn't prolong life, but shortens it. What happened to the ideals of science?" Mbeki is treated like an idiot and the colonial-attitude permeating from the west attempts to make him look like he just came in from the jungle and washed off the war paint. The attitude is "What is this Jungle Bunny doing questioning our drugs and our science."

Here's some reading, specifically the last page letter of Mbeki's response to the "Durban Declaration." I hope you can stand the facts:

"Some elements of this orchestrated campaign of condemnation worry me very deeply.

It is suggested, for instance, that there are some scientists who are 'dangerous and discredited' with whom nobody, including ourselves, should communicate or interact.

In an earlier period in human history, these would be heretics that would be burnt at the stake!

Not long ago, in our own country, people were killed, tortured, imprisoned and prohibited from being quoted in private and in public because the established authority believed that their views were dangerous and discredited.

We are now being asked to do precisely the same thing that the racist apartheid tyranny we opposed did, because, it is said, there exists a scientific view that is supported by the majority, against which dissent is prohibited.

The scientists we are supposed to put into scientific quarantine include Nobel Prize Winners, Members of Academies of Science and Emeritus Professors of various disciplines of medicine!

Scientists, in the name of science, are demanding that we should cooperate with them to freeze scientific discourse on HIV-AIDS at the specific point this discourse had reached in the West in 1984.

People who otherwise would fight very hard to defend the critically important rights of freedom of thought and speech occupy, with regard to the HIV-AIDS issue, the frontline in the campaign of intellectual intimidation and terrorism which argues that the only freedom we have is to agree with what they decree to be established scientific truths.

Some agitate for these extraordinary propositions with a religious fervour born by a degree of fanaticism, which is truly frightening.

The day may not be far off when we will, once again, see books burnt and their authors immolated by fire by those who believe that they have a duty to conduct a holy crusade against the infidels.

It is most strange that all of us seem ready to serve the cause of the fanatics by deciding to stand and wait.

It may be that these comments are extravagant. If they are, it is because in the very recent past, we had to fix our own eyes on the very face of tyranny.

I am greatly encouraged that all of us, as Africans, can count on your unwavering support in the common fight to save our continent and its peoples from death from AIDS.

Please accept, Your Excellency, the assurance of my response.

THABO MBEKI "

Mbeki didn't make this up. This isn't a crackpot idea. Mbeki read scientific journals and papers that have shredded the HIV=AIDs hypothesis. Mbeki has consulted with Nobel Laureates in this area. Even the Pope of AIDS (Robert Gallo) and the Primiere of AIDS (MOntingier) agree that HIV cannot cause AIDS and is, at best, a cofactor - and they're the ones who found the virus!

No my friend, colonialism ,in word and attitude, is well alive in the first world.