Economist's Journey to Life: IMF

Showing posts with label IMF. Show all posts

Wednesday, 3 October 2012

Day 110: Evilution - Neocolonialism

This blog is a continuation to:
Day 98: The Unholy Trinity
Day 99: Money Votes
Day 102: Liberalism
Day 103: Abstract Equality
Day 104: We have to Protect our Freedom!
Day 105: Human Liberties
Day 106: Structural Adjustment
Day 107: Getting Reality to conform to an Illusion
Day 108: Virtual Democracies
Day 109: Politics as a Double-Faced Game

Let’s have a look at why many countries who are under Structural Adjustment Programs, came to turn to international institutions like the IMF and the World Bank.

Most of these Third World Countries had been previously colonised by the West.
During this time, the colonised countries’ existence was only relevant to the Colonising country in so far that it could use it for resource extraction or trade benefits. During the colonial rule, a lot of changes took place in terms of the colonies’ infrastructures. Infrastructures were built in relation to the country’s function, and like we just mentioned, this function was to serve the colonising country.

So any and all infrastructures built in these countries, were built to direct the flow of resources towards the West. Most of the time, these infrastructures were focused on only a few goods, like cocoa, tobacco, coffee.

So what happened after independence?

During the colonial rule, all these countries were submerged into the international economic/money system – they were now part of the game. When the colonial rulers left, they had no choice but to continue playing the game – the ties were already too much ingrained. So now they had to come up with a plan to be able to continue to play the game. Unfortunately, the only infrastructures in place in these countries in terms of international trade, were those to serve the West. So even though the colonial rulers left – these colonised countries still continued to play the exact same role after colonisation. Considering that there were many of these countries, and many of them focused/specialised on the same goods/crops – they were now competing with each other to get their goods sold to the West, which forced them to lower their prices as much as possible just to get their stuff sold.

Previously during the colonial rule, the occupiers would finance much of the country’s development that would further trade. Now that they had left, these third world countries were left with nothing. The only thing they could do to ‘kickstart’ their economies = was to borrow money.

Every since then, many of these countries went into Debt and have so far not been able to repay it.

The loans they get now, are conditional as seen in Day 98 and Day 106 – where not only these countries are at the mercy of the West economically – but now also have to conform politically. So in essence, nothing has really changed. Just through money, a new form of ‘indirect’ colonialism replaced the older ‘direct’ colonialism – but countries are still being exploited.

Look at it simplistically:

The West comes and colonises Third World Countries. They take their resource and built stuff which only serves the West. Then they go away and leave the Third World Countries alone, and let them plunge into massive Debt just for the sake of survival. But the only reason why they had to go into Debt, was because of the actions of the West.

I mean, it just doesn’t make any sense!

We call ourselves ‘civilised’ and ‘evolved’ – but we’ve really not changed at all, we’ve just gotten better at covering up what we do and make it sound more acceptable – while it is totally NOT.

Friday, 28 September 2012

Day 107: Getting Reality to Conform to an Illusion

This Blog is a continuation to:
Day 98: The Unholy Trinity
Day 99: Money Votes
Day 102: Liberalism
Day 103: Abstract Equality
Day 104: We have to Protect our Freedoms
Day 105: Human Liberties
Day 106: Structural Adjustment

I forgive myself that I have accepted and allowed myself to have created an opinion as an ideology where apparently ‘freedom’ stands central and where ‘equality’ is valued – yet this ‘freedom’ and ‘equality’ is nowhere to be found/seen – as my opinion/ideology only values particular resources such as money, skills and talent – where these are not equally distributed among the population and so this result in inequality and lack of freedom as one can only do so much in this world when one is limited by money

I forgive myself that I haven’t accepted and allowed myself to see and realise that this ideology is only an opinion I have created in my mind – where my values work for me, where I was lucky to have been born in an environment where money and skill was made available to me through having been born in a family with money and thus having had access to education – and where I have taken this point and made it universal, where if I can do it, anyone can do – and so if one does not make a ‘success’ out of themselves, the reason for this must lie in the character of the person as them being ‘lazy’ – without ever stopping for a moment and seeing/realising that not everyone is born into an environment where money and education is available – and so what works for me might not (and most of the time, will not) work for others

I forgive myself that I have accepted and allowed myself to have taken my opinion which I did not practically test out / challenge in physical reality and turned it into a grand-scale opinion as ideology – and then used money as a way to enforce this ideology on others – where if others want to have money to help themselves they must comply to my ideology and so they go and comply to my ideology which has no relationship to how things actually physically, practically work in this world – but since they see no other way of getting money, they will place themselves in this precarious situation as no choice is left

I forgive myself that I have accepted and allowed myself to believe that if my ideology/opinion works for me – it should work for everyone – without actually investigating whether it is so – where I then go and impose my opinion which is a made-up illusion, unto reality and try to get reality which is real to conform to my opinion which is an illusion – which then obviously only results in the abuse of reality in the attempt to change/mould it into something which it cannot be – where millions of people pay the consequence, since my opinion as ideology is being imposed on entire countries and their population

I forgive myself that I haven’t accepted and allowed myself to see and realise that my opinion/ideology only works if you have money –and thus if one goes and impose this opinion on an environment which lacks money: the consequences are disastrous

I commit myself to show that our current economic system as values is merely based on ideology as opinion and is not rooted in actual physical practicality

I commit myself to show that traditional economists are not interested in providing actual solutions which work for everyone but are only interested in preserving their opinion as illusion and trying to impose this on reality and try to get reality to conform to an illusion which is practically impossible

I commit myself to show the importance of dealing and sorting out one’s opinions as when these opinions turn into ideologies which get enforced/imposed on a massive scale the results/consequences are disastrous and completely unnecessary

I commit myself to show that our current economic system is based on opinion and does not consider what it actually means to support Life on Earth and so I commit myself to the abolishment of our current economic system so we can make way for a New Economic System rooted in Physical Reality instead of opinion so we may finally have an Economic System of support in place

I commit myself to show that if opinions are left unchallenged, the consequences can be deadly

I commit myself to show that unless the human as human nature change – we will remain in fucked-upness – as the nature/reality of opinion on a personal scale has not yet been properly investigated/challenged but instead been protected and defended in the name of “freedom” – and where this unchallenged point manifests in a bigger scale as an ideology which is left unquestioned and has disastrous consequence but yet no-one will speak up in the name of “freedumb”

Wednesday, 26 September 2012

Day 106: Structural Adjustment

Next we will be looking at some of the main conditions that are called for by the World Bank and IMF, These conditions have been placed in order to ‘assist’ the borrowing country in economic growth so that it will be able to pay off its debts. In many cases though, the actual results from structural adjustment report that the borrowing country is worse off after having accepted a loan from the IMF/World Bank – while the rich countries are reap the benefits.

Government Reduction

The main reason the IMF and World Bank think that a country is unable to pay its foreign debt, is the assumption that the Free Market is being obstructed by government activity. Their rationale is that if the government gets downsized, markets will function more effectively, which in turn will stimulate economic growth.

In the case of government reduction policies the government requires to abandon certain functions so that the private sector can take these functions over and optimize them. In the areas or functions that the government still retains (because it is either impossible for the private sector to do it better or those functions that are hard to impossible to capitalise from but are a necessity for society) – cutbacks in spending and staff are demanded.

In most countries (both rich and poor), the government is the largest employer. In poor countries where a strong private sector has not yet been developed, the government is most often the dominant force in the country’s economy. Sudden and extensive cuts in government spending can leave hundreds of thousands of people jobless and contribute to a massive surge in unemployment. In addition to that, because the private sector is not as developed as in other countries, frequently the functions and services the government stopped providing, do not get continued by the private sector – because there is simply no-one to take it over!

Privatization

Government reduction goes hand in hand with privatization plans. Governments agree to lay off thousands of workers to prepare the way for corporations to privatize.
This however does not leave the private sector untouched by the IMF and World Bank. Privatization is often also affected by downsizing, as well as private employer assaults on unions and demands for wage reduction.

Labour Flexibility

IMF and World Bank often demand higher labour flexibility. This concept refers to the transformation of labour to a mere commodity. This policy promotes and enables companies to hire and fire workers, and change the terms and conditions of work with only minimal regulatory restriction.

The IMF/World Bank reason that if labour is treated like a commodity, the free market system will function more efficiently and effectively, which in turn will stimulate economic growth.

The theory however does not match up with reality. Joseph Stiglitz, former World Bank chief economist shared with ‘Multinational Monitor’: “The evidence in Latin America is not supportive of those conclusions. Wage flexibility has not been associated with lower unemployment. Nor has there been more job creation in general.” Where “labor market flexibility was designed to move people from low productivity jobs to high productivity jobs, too often it moved people from low productivity jobs to unemployment, which is even lower productivity.”

Wage Decompression

Wage decompression refers to the increasing of the ratio of highest to lowest paid worker. This concept is most commonly applied within the public sector where the government has the authority to regulate wages, and is done in order to “reduce government expenditure”. However, this concept is not applied to managers where the belief is held that higher pay is needed to attract high quality employees and to provide an incentive for hard work.

Sometimes the World Bank and IMF also apply wage freezes, wage cuts and wage rollbacks in the private sector (where the minimum wage is frozen or reduced). These various policies of wage adjustment are often referred to “wage flexibility”.

Pension Reforms

Pension reforms come down to the implementation of lower benefits, provided at a later age – along with the privatization of social security

Tuesday, 18 September 2012

Day 99: Money Votes

I forgive myself that I haven’t accepted and allowed myself to see and realise – that the way the IMF and World Bank operate in terms of their voting policies – is in fact how voting all over the world operates – where an individual is not respected within their individual right – but where this respect/power to vote is based on money – where those who have money are able to vote and the more money they have the more their vote counts in comparison to others

I forgive myself that I haven’t accepted and allowed myself to see and realise that we do not have an actual democracy anywhere in the world – but only work with ‘virtual democracies’ which only exist in the minds of men – where we believe and perceive ourselves to live in a ‘just’ and ‘fair’ society because ‘our political system is based on democracy – power of the people!!’ – without ever for a moment stopping and questioning/checking out whether this virtual democracy which we’ve constructed in our minds actually matches physical reality and the real political process in the world

I forgive myself that I haven’t accepted and allowed myself to actually investigate/study the true economic and political process within the world – where if one does it becomes obvious that the elite as a minority plays a major role in influence economic and political policies – where these are manipulated/lobbied to suit their own personal interest rather than the interest / benefit of the public as a whole

I forgive myself that I haven’t accepted and allowed myself to look beyond the idea I have created in my mind about ‘democracy’ where I was taught as a child that we are great and that our sense of civilisation is so amazing because we implemented ‘democracy’ which implies ‘power to the people’ / ‘rule by the people’ – while this ‘educational lesson’ was nothing but propaganda to feel good about ourselves as a human race while in reality we are the most fucked up beings in the world which the Daily News and current state of Affairs in the world CLEARLY indicate

I forgive myself that I have accepted and allowed myself to have been chuffed with the idea that ‘we live in a democracy’ and that this is ‘so cool’ because everyone counts, every person’s vote matters – but where when we are grown up and living life in the system we do not care to bother ourselves with politics because we are too busy/occupied in our minds playing out our consumerism lifestyles and do not care to be part of decision making processes, thinking it’s someone else’s job – I just want to have fun and live my life – and so I forgive myself that I have accepted and allowed myself to abdicate my self-responsibility within not being bothered with politics because I do not care about how the world/people are managed as long as I am taken care off

I commit myself to the establishment of an ACTUAL DEMOCRACY as One Man One Vote as the Equal Money System where we for the first time in the whole of human history will have an operational democracy

I commit myself to educate those willing to hear on the importance of politics and economics – and to show each one’s individual and collective responsibility – where One Man One Vote is not just a right one consider exerting, but a point of responsibility each one must consider within being Here on Earth and thus having to be part of the decision making of how things function / get managed in the world

I commit myself to show that all democracies until now have only ever existed as democracies within the minds of people – but have never been real, actual democracies – since the only power / voting power which ever existed has always been intrinsically linked to money

I commit myself to show provide everyone with Equal Voting Power through supporting an Equal Money System which will re-distribute money and so power so we can have an actual democracy for the first time

I commit myself to show that how the IMF and World Bank operate in terms of voting – where voting is based on one’s share of money as being a ‘shareholder’ / ‘investor’ – is exactly how other smaller voting processes take place expect that it is not stated as blatantly

I commit myself to a world where All people have Equal Value as Life and to put an end to our current world system where Value as the Right to Life is being hogged by a few and used as leverage against the majority in the quest for Power

Related articles

Monday, 17 September 2012

Day 98: The Unholy Trinity

The World Banks, the International Monetary Fund (IMF) and the World Trading Organization (WTO) – together they form the ‘Unholy Trinity’.
Together these three organizations form a vast and extensive set-up that enforces a neo-liberal economic ideology through conditional lending and foreign aid

The World Trade Organisation

At the end of World War II, it was proposed that a global economic organisation ought to be established. This organisation – the International Trade Organisation (ITO) – would have the task of establishing rules relating to world trade, business practices and international investment.
Through opposition of the United States though, the ITO never came into being.

Later on, some twenty-three countries entered negotiations in relation to tariff reductions. These negotiations led to tariff reductions affecting roughly one-fifth of world trade. Among the tariff reduction negotiations, other agreements were reached on rules of trade. These agreements become known as the ‘General Agreement on Tariffs and Trade’, also known as ‘GATT’.
Through the establishment of the GATT, trade barriers were gradually brought down and world trade started growing. Throughout the years, non-tariff trade related barriers started demanding more and more attention as the tariff subject was becoming of lesser importance. It was decided that a new organization should be set up to replace the GATT. This organization is now known as the World Trade Organization (WTO).
The WTO carried over its key principles from GATT: non-discrimination and national treatment.
These two principles are integrated in the overall mission of the WTO, which encompasses the promotion of fair competition, insurance of market access, encouragement of economic development and economic reform.

The World Bank & the International Monetary Fund

Besides the WTO, two other global organisations were set up after the events of World War II: the World Bank and the International Monetary Fund.
To avoid re-experiencing a complete collapse of economic relations which had followed the First World War, discussions were held between countries regarding the shape of post-war international economic order.
The end result of their regular discussions was the formation of a framework of what would become the International Monetary Fund (IMF) and the International Bank for Reconstruction and Development (World Bank).

The function of the IMF is to provide its members loans under different programmes (short, medium and long-term). Each member country is charged with a particular quota for their membership which is in proportion with their economic power. The same way, will the voting power of a country within the IMF and World Bank depend on their economic wealth. As a result, the United States holds for instance 20% of all votes – while 43 African countries together hold less than 5%.

The IMF’s most prominent role is to intervene, on request, whenever a country is experiencing a crisis in its international payments. The price countries pay for a loan is an agreement by the borrowing country to make fundamental changes to its economy (which generally means making amendments to the government and its relation to the free market) – to prevent the reoccurrence of the same problem. These requirements are known as “IMF conditionality” or “structural adjustment policies”.

Originally the World Bank was known as the International Bank for Reconstruction and Development (IBRD). The name clearly indicates that the main purpose for creating the organisation was to assist with the reconstruction of countries that had been badly affected by World War II. As time went by the countries affected became more stable, it was suggested that undeveloped countries could benefit from capital investment to speed up the development process. In the meantime the IBRD has become one of five subgroups within the World Bank. Each group has a different focus – though all groups are related towards the development of poor countries, and only developing countries are allowed to borrow from the World Bank (unlike the IMF).