As IMF faces Structural Adjustment, Global South Activists Demand Accountability

24 April 2008 by 50 Years Is Enough Network


Following the International Monetary Fund IMF
International Monetary Fund
Along with the World Bank, the IMF was founded on the day the Bretton Woods Agreements were signed. Its first mission was to support the new system of standard exchange rates.

When the Bretton Wood fixed rates system came to an end in 1971, the main function of the IMF became that of being both policeman and fireman for global capital: it acts as policeman when it enforces its Structural Adjustment Policies and as fireman when it steps in to help out governments in risk of defaulting on debt repayments.

As for the World Bank, a weighted voting system operates: depending on the amount paid as contribution by each member state. 85% of the votes is required to modify the IMF Charter (which means that the USA with 17,68% % of the votes has a de facto veto on any change).

The institution is dominated by five countries: the United States (16,74%), Japan (6,23%), Germany (5,81%), France (4,29%) and the UK (4,29%).
The other 183 member countries are divided into groups led by one country. The most important one (6,57% of the votes) is led by Belgium. The least important group of countries (1,55% of the votes) is led by Gabon and brings together African countries.

http://imf.org
’s announcement of proposed staff cuts and sales of gold about $11 billion, civil society groups reacted with demands for further accountability.

“At long last, the IMF is experiencing first hand serious budget cuts,” said Cheikh Tidiane Dieye of Environment and Development in Africa (ENDA), based in Senegal. “The poetic justice of this is palpable. In Senegal, the IMF has mandated budget cuts for years. As a result, we have been unable to invest in health care Care Le concept de « care work » (travail de soin) fait référence à un ensemble de pratiques matérielles et psychologiques destinées à apporter une réponse concrète aux besoins des autres et d’une communauté (dont des écosystèmes). On préfère le concept de care à celui de travail « domestique » ou de « reproduction » car il intègre les dimensions émotionnelles et psychologiques (charge mentale, affection, soutien), et il ne se limite pas aux aspects « privés » et gratuit en englobant également les activités rémunérées nécessaires à la reproduction de la vie humaine. , education and other essential services. If the IMF’s loss of financial power is accompanied by a loss in political power, this could be good news for all Africans.”

Others raised questions about whether or not the IMF’s financial crisis would lead to political changes at the institution.

“In Latin America, the IMF, the World Bank World Bank
WB
The World Bank was founded as part of the new international monetary system set up at Bretton Woods in 1944. Its capital is provided by member states’ contributions and loans on the international money markets. It financed public and private projects in Third World and East European countries.

It consists of several closely associated institutions, among which :

1. The International Bank for Reconstruction and Development (IBRD, 189 members in 2017), which provides loans in productive sectors such as farming or energy ;

2. The International Development Association (IDA, 159 members in 1997), which provides less advanced countries with long-term loans (35-40 years) at very low interest (1%) ;

3. The International Finance Corporation (IFC), which provides both loan and equity finance for business ventures in developing countries.

As Third World Debt gets worse, the World Bank (along with the IMF) tends to adopt a macro-economic perspective. For instance, it enforces adjustment policies that are intended to balance heavily indebted countries’ payments. The World Bank advises those countries that have to undergo the IMF’s therapy on such matters as how to reduce budget deficits, round up savings, enduce foreign investors to settle within their borders, or free prices and exchange rates.

and other international financial institutions have wreaked havoc on our economies for decades,” said Norma Maldonado of the International Gender and Trade Network in Guatemala. “If this restructuring of the IMF means the preservation of the IMF, we are opposed to it. Sales of IMF gold should be used as restitution for previous crimes, including cancellation of illegitimate debts and reparations for ecological and social damages.”

Other campaigners raised concerns about proposed changes in voting representation at the IMF.

“The IMF is an irrelevant institution in Asia,” said Joseph Purugganan of Focus on the Global South in the Philippines. “Increasing the voting shares given to big countries like China and India will not do anything to increase its relevance. Instead, the IMF must give up its policy prescriptions including fiscal and trade liberalization, privatization, and budget austerity measures. It should also begin to make restitution for its crime of enforcing a failed development paradigm on the world for over 25 years.

Article published by IFI Watchnet




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