What Do the IMF and World Bank Do?

"What has structural adjustment meant for our people? Greater poverty, greater inflation, and greater unemployment. According to data from the Honduran College of Economists, poverty grew from 68 to 73 percent, over 54 percent of the economically active population is unemployed, and inflation has increased 63.4 percent since 1990. Misery is reflected in the faces of men, children, women, and old people, who must wander through the city in search of food, housing, and work. The World Bank officials who have visited the country must have seen this misery from the moment they disembarked from the plane·"

-Narda Melendez, Coordinator, Asociaci—n Andar [Honduras]

Not only is the debt burden choking the life of Southern Africaâs human potential, indebted nations have also been pressured to agree to crippling conditionalities to get loans to repay the debt in a deepening spiral of indebtedness. The structural adjustment programs (SAPs) have caused increasing levels of unemployment, reduced government services, higher prices of food and other basic commodities and intensified poverty.

ð DESTROY DEMOCRACY

The very logic and framework of structural adjustment policies require the repression of democratic rights. This is because these policies demand drastic fiscal, monetary, and economic measures which cannot help but raise very strong reactions from the public. And such reactions have to be repressed. It is not surprising that many structural adjustment programs are successfully implemented in countries like my own, under a dictatorship·When we complain to the World Bank and the IMF, they tell us, ÎSo sorry, we donât talk to people. We only talk to governments. We only talk to your president. We only talk to your central bank governor. We only talk to your minister of finance.â This is a joint production of the international finance community with the cooperation of local elites and leaders in our own country. The majority of the people are shut out of the negotiations.

- Leonor Briones, former President, Freedom from Debt Coalition [Philippines]

Structural adjustment is a mechanism to shift the burden of economic mismanagement and financial mismanagement from the North to the South, and from the Southern elites to the Southern communities and people. Structural adjustment is also a policy to continue trade and economic patterns developed during the colonial period, but which the Northern powers want to continue in the post-colonial period. Economically speaking, we [countries in the South] are more dependent on the ex-colonial countries than we ever were. The World Bank and IMF are playing the role that our ex-colonial masters used to play.

During the 1980âs under structural adjustments, instead of flowing North to South through loans and aid investment, more money flowed from South to North in debt servicing, capital flight, and profit from transnational corporations and the privatization of state-owned companies. In truth and fact, the countries of the South are subsidizing the countries of the North.

ð PREVENT SUSTAINABLE DEVELOPMENT

Since the Îlost decadeâ of the 1980âs, it has become painfully clear that the World Bank and the IMF are intended to benefit the wealthy and the powerful, yet they continue to pretend that they are serving the community of nations·. Their programs on reproductive health and education are constantly undermined by their macro-economic policies, which destroy investments in public health and education. Sustainable development will never be achieved until these contradictions are confronted.

ð STRENGTHEN THE RESOLVE TO RESIST CORPORATE GLOBALIZATION

We are confident in linking the conditions associated with current forms of debt relief, to our ongoing suffering. And we are committed to ending such conditions, replacing the Washington Consensus on neoliberal development with an African Consensus on genuine development, and adding to our demands the need for the reparations required to assure our societyâs ability to meet our basic human needs and to repair our basic human needs and to repair our degraded environments.