The World Bank and the IMF

[R_P_A_S]

Lately I been hearing about how Ecuador kicked out the world bank representative and how Venezuela has withdrawn from IMF and The World Bank..

can someone shed some light on what this is all about? is this good? and what role do they play in the world market? these institutions..?

[rebelworker]

I recomend, " Breaking the Bank" an excellent video by indy media.

[Raúl Duke]

I heard they give special loans yet they come with a set of conditions that generally have destroyed these countries economies...

However, I also head those conditions are very favorable to multinational companies.

[Demogorgon]

They are international organisations cncerned with with finance. The IMF primarilly focuses on exchange rates and balances of payments and the world bank on economic development. Both offer advice and assistance to domestic Governments. You will often here of countries being given loans to help with development or to sort out some economic disaster or another.

The problem (you just knew it was coming, didn't you?) is that this is done in a way that grossly favours capitalism and globalisation. To qualify for loans, countries have to "liberalise" their markets which means privitisation and opening themselves up to global corporations. Previously good quality health and even education services have vanished across the world due to privitisation. Similarly standards of living have dropped due to multi-nationals suddenly getting a free range to do as they wish.

And that is not even mentioning the i terest charged on these loans.

[Whitten]

Yes, the interest charged on the loans is designed to keep these developing countries in debt.

[Ander]

Read "Confessions of An Economic Hitman."

[Fightin Da Man]

The World Bank and IMF have different histories, but have grown together. The history of the World Bank is the history of development. The purpose was to make loans to poor countries for the purpose of developing the country. Of course, the shift in focus of "development" in those circles has essentially turned the stated goal of the World Bank into addressing/alleviating/eliminating poverty. The IMF, has its roots in protecting the international monetary system. It was designed to be a lender of last resort to aid countries facing balance of payments crises.

Due to several factors (poor conceptions of development, private loaning to poor countries at floating interest rates, etc) it has turned out that most of the countries most in need of development are also deeply in debt and facing balance of payment crises. Conditions on which money is loaned from the IMF generally include Structural Adjustment Programs, which, while allegedly unique and based on individual circumstances, all amount basically to cutting government spending (so that there's more money available to pay interest on loans) and opening up the country to foreign investment while adopting an export-oriented economic focus (so that the government can get foreign currency, namely dollars).

The sum total is that these two organizations force countries to change their policies to be more favorable to the global north, while at the same time keeping them up to their eyeballs in debt.