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Debt Slavery - Economic Colonialism - The International Monetary Fund

See also my page on the Nazi money-laundering Bank of International Settlements - sister organisation to the World Bank

04Mar02 - Greg Palast - The World Bank's Scams Laid Bare

The Grip of Death - A study of modern money, debt slavery and destructive economics - Published in the UK June 1998

Destroying National Currencies

Stop fast track funding for the IMF


The World Bank's Scams Laid Bare

Alex Jones Show Appearance Transcript

Monday, March 4, 2002

AJ: This is earth shattering. Can you break it down for us and tell us what the economists have done?

GP: Well, I'll tell you two things. One, I spoke to the former chief economist, Joe Stiglitz who was fired by the (World) Bank. So I, on BBC and with Guardian, basically spent some time debriefing him. It was like one of the scenes out of Mission Impossible, you know where the guy comes over from the other side and you spend hours debriefing him. So I got the insight of what was happening at the World Bank. In addition, he did not brief me but I got some other sources. He would not give me inside documents but other people handed me a giant stash of secret documents from the World Bank and the International Monetary Fund.

AJ: So to insulate himself, somebody else did it.

GP: No, I'm telling you. He wouldn't touch it but I really did get from completely independent sources a big stack of documents.

AJ: Just like you got W199I, from the same folks we got it from.

GP: And so one of the things that is happening is that, in fact, I was supposed to be on CNN with the head of the World Bank Jim Wolfensen and he said he would not appear on CNN ever if they put me on. And so CNN did the craziest thing and pulled me off.

AJ: So now they are threatening total boycott.

GP: Yea right. So what we found was this. We found inside these documents that basically they required nations to sign secret agreements, in which they agreed to sell off their key assets, in which they agreed to take economic steps which are really devastating to the nations involved and if they didn't agree to these steps, there was an average for each nation that signed one-hundred and eleven items that they are required to sign on to. If they didn't follow those steps they would be cut-off from all international borrowing. You can't borrow any money in the international marketplace. No one can survive without borrowing, whether you are people or corporations or countries - without borrowing some money and having some credit and ...

AJ: Because of the debt inflation pit they've created.

GP: Yea, well, see one of the things that happened is that - we've got examples from, I've got inside documents recently from Argentina, the secret Argentine plan. This is signed by Jim Wolfensen, the president of the World Bank. By the way, just so you know, they are really upset with me that I've got the documents, but they have not challenged the authenticity of the documents. First, they did. First they said those documents don't exist. I actually showed them on television. And cite some on the web, I actually have copies of some...

AJ: Greg Palast dot com?

GP: Yea, So then they backed off and said yea those documents are authentic but we are not going to discuss them with you and we are going to keep you off the air anyway. So, that's that. But what they were saying is look, you take a country like Argentina, which is, you know, in flames now. And it has had five presidents in five weeks because their economy is completely destroyed.

AJ: Isn't it six now?

GP: Yea, it's like the weekly president because they can't hold the nation together. And this happened because they started out in the end of the 80s with orders from the IMF and World Bank to sell-off all their assets, public assets. I mean, things we wouldn't think of doing in the US, like selling off their water system.

AJ: So they tax the people. They create big government and big government hands it off to the private IMF/World Bank. And when we get back, I want to get to the four-parts that you elegantly lay out here where they actually pay off the politicians billions to their Swiss bank accounts to do this transfer.

GP: That's right.

AJ: This is like one of the biggest stories ever, Sir. I'm sorry, please continue.

GP: So what's happening is - this is just one of them. And by the way, it's not just anyone who gets a piece of the action. The water system of Buenos Aires was sold off for a song to a company called Enron. A pipeline was sold off, that runs between Argentina and Chile, was sold off to a company called Enron.

AJ: And then the globalists blow out the Enron after transferring the assets to another dummy corporation and then they just roll the theft items off.

GP: You've got it. And by the way, you know why they moved the pipeline to Enron is that they got a call from somebody named George W. Bush in 1988.

AJ: Unbelievable, Sir. Stay right there. We are talking to Greg Palast.


AJ: We are talking to Greg Palast. He is an award-winning journalist, an American who has worked for the BBC, London Guardian, you name it, who has dropped just a massive bomb-shell on the Globalists and their criminal activity. There is no other word for it. You link through at, you can link to his web site -, or any of the other great reports he has been putting out. He now has the secret documents. We have seen the activity of the IMF/World Bank for years. They come in, pay off politicians to transfer the water systems, the railways, the telephone companies, the nationalized oil companies, gas stations - they then hand it over to them for nothing. The Globalists pay them off individually, billions a piece in Swiss bank accounts. And the plan is total slavery for the entire population. Of course, Enron, as we told you was a dummy corporation for money laundering, drug money, you name it, from the other reporters we have had on. It's just incredibly massive and hard to believe. But it is actually happening. Greg Palast has now broken the story world-wide. He has actually interviewed the former top World Bank economist. Continuing Sir with all these points. I mean for the average person out there, in a nutshell, what is the system you are exposing?

GP: We are exposing that they are systematically tearing nations apart, whether it's Ecuador or Argentina. The problem is some of these bad ideas are drifting back into the U.S. In other words, they have run out of places to bleed. And the problem is, this is the chief economist, this is not some minor guy. By the way, a couple of months ago, after he was fired, he was given the Nobel Prize in Economics. So he is no fool. He told me, he went into countries where they were talking about privatizing and selling off these assets. And basically, they knew, they literally knew and turned the other way when it was understood that leaders of these countries and the chief ministers would salt away hundreds of millions of dollars.

AJ: But it's not even privatization. They just steal it from the people and hand it over to the IMF/World Bank.

GP: They hand it over, generally to the cronies, like Citibank was very big and grabbed half the Argentine banks. You've got British Petroleum grabbing pipelines in Ecuador. I mentioned Enron grabbing water systems all over the place. And the problem is that they are destroying these systems as well. You can't even get drinking water in Buenos Aires. I mean it is not just a question of the theft. You can't turn on the tap. It is more than someone getting rich at the public expense.

AJ: And the IMF just got handed the Great Lakes. They have the sole control over the water supply now. That's been in the Chicago Tribune.

GP: Well the problem that we have is - look, the IMF and the World Bank is 51% owned by the United States Treasury. So the question becomes, what are we getting for the money that we put into there? And it looks like we are getting mayhem in several nations. Indonesia is in flames. He was telling me, the Chief Economist, Stiglitz, was telling me that he started questioning what was happening. You know, everywhere we go, every country we end up meddling in, we destroy their economy and they end up in flames. And he was saying that he questioned this and he got fired for it. But he was saying that they even kind of plan in the riots. They know that when they squeeze a country and destroy its economy, you are going to get riots in the streets. And they say, well that's the IMF riot. In other words, because you have riot, you lose. All the capital runs away from your country and that gives the opportunity for the IMF to then add more conditions.

AJ: And that makes them even more desperate. So it is really an imperial economy war to implode countries and now they are doing it here with Enron. They are getting so greedy - they are preparing it for this country.

GP: I've just been talking to, out in California just yesterday, from here in Paris, the chief investigators of Enron for the State of California. They are telling me some of the games these guys are playing. No one is watching that. It's not just the stockholders that got ripped off. They sucked millions, billions of dollars out of the public pocket in Texas and California in particular.

AJ: Where are the assets? See, everybody says there are no assets left since Enron was a dummy corporation - from the experts I've had on and they transferred all those assets to other corporations and banks.

GP: Well yea, this stuff has really gone just like a three-card Monty game. I mean remember that there is money at the bottom. You did pay California's electric bills according to the investigations, they are telling me that they were pumped up unnecessarily by 9 to 12-billion dollars. And I don't know who they are going to get it back from now.

AJ: Well they actually caught the Governor buying it for $137 per megawatt and selling it back to Enron for $1 per megawatt and doing it over and over and over again.

GP: Yea, the system has gotten completely out of control and these guys knew exactly what was happening. Well, you have to understand that some of the guys who designed the system in California for deregulation then went to work for Enron right after. In fact, here I'm in London right now and we have, the British has some responsibility here. The guy who was on the audit committee of Enron, Lord Wakeham. And this guy is a real piece of work, there isn't a conflict of interest that he hasn't been involved in.

AJ: And he is the head of NM Rothschild.

GP: There isn't anything that he doesn't have his fingers in. He's on something like fifty Boards. And one of the problems, he was supposed to be head of the audit committee watching how Enron kept the books. And in fact, they were paying him consulting fees on the side. He was in Margaret Thatcher's government and he's the one who authorized Enron to come into Britain and take over power plants here in Britain. And they owned a water system in the middle of England. This is what this guy approved and then they gave him a job on the board. And on top of being on the board, they gave him a huge consulting contract. So you know, this guy was supposed to be in charge of the audit committee to see how they were handling their accounts.

AJ: Well, he is also the head of the board to regulate the media.

GP: Yes, he is, because I have run into real problems, because he regulates me.

AJ: They are also trying to pass laws in England where you've got an 800-year old well, or in some cases a 2000-year old well that the Romans built that's on your property and they say we are putting a meter on it. You can't have your own water.

GP: Yea, and that's Lord Wakeham. I mean this is the guy from Enron. He is a real piece of work. He can't be touched here because like I say he actually regulates the media. So if you complain, he's got his hand on your pen.

AJ: Burrow into NM Rothschild, you'll find it all there. Go through these four points. I mean you've got the documents. The IMF/World Bank implosion, four points, how they bring down a country and destroy the resources of the people.

GP: Right. First you open up the capital markets. That is, you sell off your local banks to foreign banks. Then you go to what's called market-based pricing. That's the stuff like in California where everything is free market and you end up with water bills - we can't even imagine selling off water companies in the United States of America. But imagine if a private company like Enron owned your water. So then the prices go through the roof. Then open up your borders to trade - complete free marketeering. And Stiglitz who was the chief economist, remember he was running this system, he was their numbers man and he was saying it was like the opium wars. He said this isn't free trade; this is coercion trade. This is war. They are taking apart economies through this.

AJ: Well look, China has a 40% tariff on us, we have a 2% on them. That's not free and fair trade. It's to force all industry to a country that the globalists fully control.

GP: Well, you know Walmart - I did a story, in fact, if you read my book. Let me just mention that I've got a book out, "The Best Democracy Money Can Buy" about how, unfortunately, America has been put up for sale. "The Best Democracy Money Can Buy" is coming out this week. But I have a story in there about how Walmart has 700 plants in China. There is almost nothing in a Walmart store that comes from the United States of America, despite all the eagles on the wall.

AJ: Exactly, like 1984, then they have big flags saying "Buy American" and there's hardly anything --- it's Orwellian double-think.

GP: What's even worst is they will hire a factory and right next to it will be the sister factory which is inside a prison. You can imagine the conditions of these workers producing this lovely stuff for Walmart. It's really....

AJ: And if an elitist needs a liver, they just call.

GP: (Laughs) I know, it's grim. In fact, I talked to a guy, Harry Wu, is his name and, in fact, he broke into, he's been in Chinese prison for 19 years. No one believed his horrible stories. He actually broke back into prison, took a camera with him and took pictures of the conditions and said this is the conditions of factories where Walmart is getting its stuff made at, it's all....

AJ: I was threatened to be thrown off TV here in Austin when I aired video of little girls 4-years old chained down, skinnier than Jews in concentration camps, to die. And I was threatened, if you ever air that again, you will be arrested.

GP: Well you know, it is horrifying stuff that, unfortunately, I have been handed and Stiglitz, was very courageous for him to come out and make these statements. Like I said, he didn't provide me the documents. The documents really sealed it because it said this is what really happened. They really do say sign on the dotted line agreeing to 111 conditions for each nation. And the public has no say; they don't know what the hell is happening to them. All they know....

AJ: Go back into privatization. Go through these four points. That's the key. It sends billions to politicians to hand everything over.

GP: Yea, he called it briberization, which is you sell off the water company and that's worth, over ten years, let's say that that's worth about 5 billion bucks, ten percent of that is 500 million, you can figure out how it works. I actually spoke to a Senator from Argentina two weeks ago. I got him on camera. He said that after he got a call from George W. Bush in 1988 saying give the gas pipeline in Argentina to Enron, that's our current president. He said that what he found was really creepy was that Enron was going to pay one-fifth of the world's price for their gas and he said how can you make such an offer? And he was told, not by George W. but by a partner in the deal, well if we only pay one-fifth that leaves quit a little bit for you to go in your Swiss bank account. And that's how it's done.

AJ: This is the ....

GP: I've got the film. This guy is very conservative. He knows the Bush family very well. And he was public works administrator in Argentina and he said, yea, I got this call. I asked him, I said, from George W. Bush. He said, yea, November 1988, the guy called him up and said give a pipeline to Enron. Now this is the same George W. Bush who said he didn't get to know Ken Lay until 1994. So, you know.....

AJ: So now they are having these white-wash hearings. You know I was at Enron yesterday in Houston because I'm now here in Austin. We were like 30-feet from the door, right on the sidewalk and I have it on video - goons came up and said you can't videotape. I said go ahead and have me arrested. I mean I'm talking on the sidewalk, Greg.

GP: Well, you know, I was there in May, telling people in Britain you've never heard of Enron, but ... And these are the guys who have figured out how to (garbled) this government. In fact, we saw some interesting documents, a month before Bush took office, Bill Clinton, I think to get even with Bush's big donor, cut Enron out of the California power market. He put a cap on the prices they could charge. They couldn't charge more than one-hundred times the normal price for electricity. That upset Enron. So Ken Lay personally wrote a note to Dick Cheney saying get rid of Clinton's cap on prices. Within 48 hours of George W. Bush taking office, his energy department reversed the clamps on Enron. OK, how much is that worth for those guys. You know that has got to be worth, that paid off in a week all the donations.

AJ: Listen at the bombs you are dropping. You are interviewing these ministers, former head of IMF/World Bank economist - all of this, you've got the documents, paying people's Swiss Bank accounts, all this happening. Then you've got Part 2, what do they do after they start imploding?

GP: Well, then they tell you to start cutting your budgets. A fifth of the population of Argentina is unemployed, and they said cut the unemployment benefits drastically, take away pension funds, cut the education budgets, I mean horrible things. Now if you cut the economy in the middle of a recession that was created by these guys, you are really going to absolutely demolish this nation. After we were attacked on September 11, Bush ran out and said we got to spend $50 to $100 billion dollars to save our economy. We don't start cutting the budget, you start trying to save this economy. But they tell these countries you've got to cut, and cut, and cut. And why, according to the inside documents, it's so you can make payments to foreign banks - the foreign banks are collecting 21% to 70% interest. This is loan-sharking. If fact, it was so bad that they required Argentina to get rid of the laws against loan-sharking. because any bank would be a loan-shark under Argentine law.

AJ: But Greg, you said it yourself and the documents show it. They first implode the economy to create that atmosphere. They institute the entire climate that does this.

GP: Yea, and then they say, well gee, we can't lend you any money except at these loan-shark rates. We don't allow people to charge 75% interest in the United States. That's loan-sharking.

AJ: Part 3 and Part 4. What do they do after they do that?

GP: Like I said, you open up the borders for trade, that's the new opium wars. And once you have destroyed an economy that can't produce anything, one of the terrible things is that they are forcing nations to pay horrendous amounts for things like drugs - legal drugs. And by the way, that's how you end up with an illegal drug trade, what's there left to survive on except sell us smack and crack and that's how...

AJ: And the same CIA national security dictatorship has been caught shipping that in.

GP: You know, we are just helping our allies.

AJ: This is just amazing. And so, drive the whole world down, blow out their economies and then buy the rest of it up for pennies on the dollar. What's Part 4 of the IMF/World Bank Plan?

GP: Well, in Part 4, you end up again with the taking apart of the government. And by the way, the real Part 4 is the coup d'etat. That's what they are not telling you. And I'm just finding that out in Venezuela. I just got a call from the President of Venezuela.

AJ: And they install their own corporate government.

GP: What they said was here you've got an elected president of the government and the IMF has announced, listen to this, that they would support a transition government if the president were removed. They are not saying that they are going to get involved in politics - they would just support a transition government. What that effectively is is saying we will pay for the coup d'etat, if the military overthrows the current president, because the current president of Venezuela has said no to the IMF. He told those guys to go packing. They brought their teams in and said you have to do this and that. And he said, I don't have to do nothing. He said what I'm going to do is, I'm going to double the taxes on oil corporations because we have a whole lot of oil in Venezuela. And I'm going to double the taxes on oil corporations and then I will have all the money I need for social programs and the government - and we will be a very rich nation. Well, as soon as they did that, they started fomenting trouble with the military and I'm telling you watch this space: the President of Venezuela will be out of office in three months or shot dead. They are not going to allow him to raise taxes on the oil companies.

AJ: Greg Palast, here is the problem. You said it when you first came out of the gates. They are getting hungry, they are doing it to the United States now. Enron, from all the evidence that I've seen was a front, another shill, they would steal assets and then transfer it to other older global companies, then they blew that out and stole the pension funds. Now they are telling us that terrorism is coming any day. It's going to happen if you don't give your rights up. Bush did not involve Congress and the others who are supposed to be in the accession if there is a nuclear attack in the secret government, Washington Post -"Congress Not Advised of Shadow Government." We have the Speaker of the House not being told. This looks like coup d'etat here. I'm going to come right out with it. We had better spread the word on this now or these greedy creatures are going to go all the way.

GP: I'm very sad about one thing. I report this story in the main stream press of Britian. I'm on the BBC despite Lord Wakeham. I know he doesn't like me there. I'm in the BBC, I'm in the main daily paper, which is the equivalent of the New York Times or whatever, and we do get the information out. And I'm just very sorry that we have to have an alternative press, an alternative radio network and everything else to get out the information that makes any sense. I mean this information should be available to every American. I mean, after all, it's our government.

The Grip of Death

A study of modern money, debt slavery and destructive economics

by Michael Rowbotham

This lucid and original account of where our money comes from explains why most people and businesses are so heavily in debt. Exploding more myths than any other book this century, it's all about subjects very close to home: mortgages, building societies and banks, food and farming, transport, worldwide poverty, and what's on the supermarket shelf.

It explains ­

· why virtually all the money in the world economy has been created as a debt; why only 3% of UK money exists as 'legal tender'; and why in a world reliant upon money created as debt, we are kept perpetually short of money.

· how and why mortgages are responsible for almost two-thirds of the total money stock in the UK, and 80% in the US.

· why business and corporate debt is at its highest level ever.

· why debts mean that a small farm can be productively very efficient, but financially not 'viable'.

· why national debts can never be paid off ­ without monetary reform.

· how debt fuels the 'need to grow', revolutionising national and global transport strategies, destroying local markets and producers and increasing waste, pollution and resource consumption.

· how 'Third World debt' is a mechanism used by the developed nations to inject ever-increasing amounts of money into their own economies, and why debtor nations can never repay the debts.

· why politicians who rely on the banks for money can't fund public services.

· why 'debt-money' is undemocratic and a threat to human rights.

The author proposes a new mechanism for the supply of money, creating a supportive financial environment and a decreasing reliance on debt.

Michael Rowbotham is a teacher and writer. £15 pbk 352pp 1 897766 40 8


"Forget everything you thought you knew about money. In terms the lay person can understand, myth buster Rowbotham fearlessly reveals deeply disturbing truths about our debt-based money system that befuddle bankers, economists, and politicians. An essential self-education tool for anyone interested in creating a world that works, pushing the issues further and posing the implications more bluntly than I have seen anywhere else."

David C. Korten, author, When Corporations Rule the World, and board chair, The Positive Futures Network

"A trenchant analysis of the current arrangements for credit creation, a powerful indictment of their baleful consequences, and a persuasive case for reform."

Prof. Bryan Gould, Vice-Chancellor, University of Waikato

"As a result of fractional reserve banking over 90% of our money supply is loaned into existence by commercial banks and thus must grow by enough to at least pay the interest on the loan by which it was created. This gives a basic growth bias to the economy. Fractional reserve banking also transfers to private hands the state's traditional right to issue money, and does so in a way that increases the cyclical instability of the economy. The corrective call for 100% reserve requirements has been made periodically not only by so-called 'monetary cranks', but also by economists of impeccable reputation such as Frank Knight and Irving Fisher. Michael Rowbotham's forceful discussion is a welcome revival of an issue that has been too long dormant."

Prof. Herman E. Daly

"An incisive and readable book: it opens up in a very fresh way what money is and how it works (and doesn't work)."

Rt Rev Peter Selby, Bishop of Worcester

THE GRIP OF DEATH offers unique insights into some of the world's most pressing problems:

· the financial crisis in south-east Asia is due, not to poor economic management, but to the reliance of the world's economies on banking, which is an inherently unstable mechanism.

· most people in developed countries are up to their necks in debt, chiefly due to the system of buying homes with mortgages. But this system is itself entirely illegitimate: governments use the mortgage system as a privatised means of creating money, highly profitable for the banks and lending corporations but crippling for the borrower.

· the refusal to fund adequate public services ­ governments say "We haven't got the money" ­ is down to a refusal by governments to create and supply money themselves according to need. Instead, they entrust the supply of money to banks, who only create money as a debt where interest can be charged on it. Virtually all money is thus created as a debt, purely as a profit-making exercise. But this is a choice made by government.

· all Third World debt should be repudiated. As this book shows, most such debts were and are created by the institutions of the developed countries as a mechanism for injecting more money into their own economies. They were never intended to finance the underdeveloped world or relieve poverty, and they don't.

· the UK government is cutting expenditure in order to reduce the national debt. Yet national debts can never be repaid. In any case the UK debt and annual deficit is far lower than in many economically successful European countries. So why will the government not stop this charade and pay better welfare and health benefits and fund education properly?

All in all, a crippling attack on the popular assumptions surrounding economics, money and borrowing, and the relationship between the rich Northern world and the poor South.

To Order

Post your cheque for £15.00 sterling to Jon Carpenter Publishing, 2 The Spendlove Centre, Charlbury, OX7 3PQ, England.

Or phone or fax your credit card details to +44 (0)1689 870437.

Or e-mail

Jon Carpenter's complete catalogue:


Michel Chossudovsky

Department of Economics, University of Ottawa,
Monday, 12 January 1998

Since the onslaught of the debt crisis in the early 1980s, the IMF has played a central role in exchange rate policy often requiring indebted Third World countries to devalue their currency by 50 percent as a "pre-condition" for the subsequent negotiation of a loan agreement. IMF-sponsored currency devaluations have invariably resulted in abrupt price hikes and a dramatic compression of real earnings.

What is distinct in the cases of Korea, Indonesia and Thailand is that the devaluation (which preceded the bail-out agreement and the imposition of sweeping macro-economic reforms) had not been explicitly demanded by the Washington-based bureaucracy. Rather it was the result of speculative pressures on currency markets exerted by the large merchant banks and financial institutions (through the use of a variety of speculative instruments).

In the context of the Asian financial crisis, "institutional speculators" (rather than the IMF) have come to play an indirect role in the process of macro-economic reform. In other words, international banking and financial institutions have (in a de facto sense) dictated country-level foreign exchange policy, -- ie. through the deliberate manipulation of currency markets. In this context, "institutional speculators" are involved in "setting the stage" for the subsequent IMF bail-out operation. They are also involved in routine consultations with the Bretton Woods institutions pertaining to the various components of the macro-economic reform package included in the bail-out agreements (eg. the deregulation of Korea's financial sector and the opening up of Seoul's bond market to foreign capital).

In turn, the same Western and Japanese financial and banking institutions (routinely involved in currency and stock market speculation) are the creditors of Asia's central banks. They also hold large amounts of short term debt and have, therefore, a vested interest in averting loan default by Asian financial institutions. Not surprisingly, these same Western and Japanese financial institutions have pressured G7 governments to implement the bail-out operations of which they are the ultimate beneficiaries, -- ie. the 57 billion dollars under the IMF- sponsored agreement with the Seoul government will be used to reimburse Korea's creditors.

How will these multi-billion dollars operations be financed? The contribution of the Bretton Woods institutions and the Asian Development Bank (ADB) constitutes but a fraction of the total. The largest contributions to the bail-outs are from G7 governments, requiring the issuing of vast amounts of public debt.

In other words, G7 governments have come to the rescue of the merchant and commercial banks by accepting to finance the bail-out, yet to undertake this objective, G7 national treasuries are obliged to issue large amounts of public debt which is invariably underwritten by the large merchant banks. In other words, the "beneficiaries" of the bail-out are also the underwriters of the public debt operation required to finance the bail-out. An absurd situation: G7 governments are "financing their own indebtedness"...

While the bail-outs are conducive to the building up of public debts (in both the Asian and G7 countries) -- thereby reinforcing the stranglehold of the creditors over the conduct of economic policy -- tens of billions of dollars of public money are transferred into the hands of private financial institutions leading to an unprecedented accumulation of private wealth. In turn, the macro-economic reforms imposed in the context of the IMF-sponsored bail-outs are conducive to a dramatic collapse of the real economy leading to the impoverishment of millions of people.

Copyright by Michel Chossudovsky, Ottawa 1997. All rights reserved.


By Michel Chossudovsky

Professor of Economics, University of Ottawa, author of "The Globalisation of Poverty, Impacts of IMF and World Bank Reforms, Third World Network, Penang and Zed Books, London, 1997. He is also the author of "Dismantling Yugoslavia, Colonizing Bosnia," Covert Action Quarterly (CAQ), Washington, D.C., Number 56, Spring 1996 and "The Business of Crimes and the Crimes of Business: Globalization and the Criminalization of Economic Activity," CAQ, Number 58, Fall 1996. The author can be contacted at

Ottawa, K1N6N5
Fax: 1-613-789-2050
Alternative fax: 1-613-562-5999
- Monday, 12 January 1998 -


U.S. Network for Global Economic Justice, January 1998

The current round of massive bailouts in East Asia -- South Korea, Indonesia, and Thailand -- has focused unusual attention on the International Monetary Fund (IMF). Apparently believing that legislators will now see the IMF as indispensable, the Clinton Administration has chosen this moment to request $18 billion for it, but they have probably been surprised by the resistance from legislators across the political spectrum. This is a critical opportunity to block or heavily condition funding for the agency most responsible for designing and managing the globalized economy -- an opportunity that many groups seeking to combat the IMF's impact on the poor, the environment, and labor have long been waiting for.

The IMF is the lender of last resort for countries with debt and other financial problems, and it uses its power to impose strict conditions on countries in exchange for its loans. These economic policy packages, usually called "structural adjustment programs" (SAPs) have been imposed on over 90 countries around the world, including most of Latin America, South Asia, and Africa. Other agencies like the World Bank also require SAPs, but it is the IMF which sets the pace. The conditions on the bailout loans being made to the East Asia governments closely resemble those of standard SAPs.

One of the main components of structural adjustment programs is the requirement that labor policies be made more "flexible." This obnoxious euphemism masks the fact that IMF bureaucrats practically dictate to governments around the world the policies that erode legitimate protections for workers and union organizers and encourage neglect of minimum wage laws. Countries that sign with the IMF usually experience massive layoffs in short order. South Korea is now bracing for a million layoffs, just as about two million Mexicans lost their jobs in the wake of the IMF-led bailout of 1995.

In tandem with its philosophy on labor laws, the IMF also makes the rules that foster the growth of free-trade zones (and maquila sectors) around the world. They do this by pressuring governments to lower barriers to outside investment and to eliminate rules limiting the ability of corporations to move their profits out of the country.

Now that IMF economics have been demonstrated so vividly in East Asia (which got into trouble partly because of such policies), we can strike a real blow against this pro-corporate, anti-worker regime promoted around the world by the IMF.

The $18 billion appropriation President Clinton seeks will probably come up soon after Congress starts its new session at the end of January. It is likely to be introduced as part of a "budget supplemental" attached to an unrelated, high-profile bill such as the one to extend U.S. troops' presence in Bosnia. In this way, the Administration would hope to prevent an open debate on this obscure but very powerful institution.

It is vital that we prevent Clinton from "fast-tracking" IMF funding in this way. The stakes are high: if we succeed, we will have created significant momentum for heavily conditioning, or even eliminating, U.S. support for the institution most responsible for imposing poverty policies around the world. If we fail, we may have lost any opportunity to have a real impact on IMF policies for at least the next three years.

The first step is to contact legislators and urge them to reject President Clinton's attempt to "fast-track" IMF funding through an attachment to an unrelated bill. Let the IMF, which imposes harsh policies on countries from South Korea to Zimbabwe to Nicaragua in a profoundly undemocratic manner, be exposed to the full light of the democratic process in the U.S., its biggest contributor and most powerful member. Legislators should commit themselves to insuring that IMF funding goes through the normal appropriations process, with full and open public hearings every step of the way.

The effort to block or heavily condition IMF funding will not stop with this "fast-track" maneuver. The 50 Years is Enough Network is preparing a longer analysis that should be available next week (week of January 19). We also have a sample op-ed piece and other materials in the works. It is vital that we wage this first battle NOW, but the overall campaign is just getting underway.

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Information provided by 50 Years is Enough: U.S. Network for Global Economic Justice (202) 463-2265, e-mail address:


Watching nthe International Financial Institutions

The Bretton Woods Project
Critical Voices on the IMF and the World Bank
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