The IMF’s War on America SOURCE
The headlines of an article in yesterday’s Market Watch says, IMF Bombshell: Age of America Nears End (see story below).
This article covers a report by the International Monetary Fund that predicts the end of what they call “The Age of America.” The IMF says that China will overtake the American economy in 2016.
The fact of the matter is that the data and statistics cited by the IMF are flawed.
But this does not dismiss the fact that the Chinese economy is growing at a much more rapid rate than the American economy; and if we do not change the way in which we are operating our economy, and stop the annual trillion dollar budget deficits, the Chinese economy will indeed surpass that of America.
But that is not the point of this blog post. No, the point of this post is that this story is IMF black propaganda about the U.S. The point of Crisis by Design the Untold Story of the Global Financial Coup is that the financial crisis was created in order to take down the US and the US dollar as the stable point in international finance and to replace them with a “Global Monetary Authority.”
Those of you that have followed my writings and/or this blog, know that in fact a Global Monetary Authority was put in place in April of 2009. That’s a done deal. But America still clings to economic leadership.
The significance of this statement issued by the IMF is not the phony facts and figures. No, it’s that the article is consistent with the IMF’s jihad, along with the Bank for International Settlements, to destroy the dollar and America as an economic power by putting out this kind of black PR.
And that’s what it is. This is Black Propaganda that aimed at driving home the message that America is on her way out.
Let be honest here, we have brought this on ourselves. We cannot continue to enjoy any semblance of economic prosperity or, for that matter, be the strongest economy in the world with trillion-dollar-per year budget deficits. But the point I am making here is that the IMF is doing everything it can PR-wise to create the impression that America’s best days are behind her. We need to restore fiscal sanity to Washington government to ensure that that is not the case.
Keep your powder.
John Truman Wolfe, author of America the Litigious, Mind Games, and The Gift has released his latest stunning bestseller – Crisis By Design: The Untold Story of the Global Financial Coup and What You Can Do About It. Wolfe draws on experience as a senior credit officer in two banks, and co-founder of a prestigious Los Angeles based business management company, where as a registered investment adviser he oversaw the financial and investment matters of some of the biggest names in Hollywood.
IMF Bombshell: Age of America Nears End
Commentary: China’s economy will surpass the U.S. in 2016
April 25, 2011
The International Monetary Fund has just dropped a bombshell, and nobody noticed.
For the first time, the international organization has set a date for the moment when the “Age of America” will end and the U.S. economy will be overtaken by that of China.
And it’s a lot closer than you may think.
According to the latest IMF official forecasts, China’s economy will surpass that of America in real terms in 2016 — just five years from now.
Put that in your calendar.
It provides a painful context for the budget wrangling taking place in Washington, D.C., right now. It raises enormous questions about what the international security system is going to look like in just a handful of years. And it casts a deepening cloud over both the U.S. dollar and the giant Treasury market, which have been propped up for decades by their privileged status as the liabilities of the world’s hegemonic power.
According to the IMF forecast, whomever is elected U.S. president next year — Obama? Mitt Romney? Donald Trump? — will be the last to preside over the world’s largest economy.
Most people aren’t prepared for this. They aren’t even aware it’s that close. Listen to experts of various stripes, and they will tell you this moment is decades away. The most bearish will put the figure in the mid-2020s.
But they’re miscounting. They’re only comparing the gross domestic products of the two countries using current exchange rates.
That’s a largely meaningless comparison in real terms. Exchange rates change quickly. And China’s exchange rates are phony. China artificially undervalues its currency, the renminbi, through massive intervention in the markets.
The comparison that really matters
The IMF in its analysis looks beyond exchange rates to the true, real terms picture of the economies using “purchasing power parities.” That compares what people earn and spend in real terms in their domestic economies.
Under PPP, the Chinese economy will expand from $11.2 trillion this year to $19 trillion in 2016. Meanwhile the size of the U.S. economy will rise from $15.2 trillion to $18.8 trillion. That would take America’s share of the world output down to 17.7%, the lowest in modern times. China’s would reach 18%, and rising.
Just 10 years ago, the U.S. economy was three times the size of China’s.
Naturally, all forecasts are fallible. Time and chance happen to them all. The actual date when China surpasses the U.S. might come even earlier than the IMF predicts, or somewhat later. If the great Chinese juggernaut blows a tire, as a growing number fear it might, it could even delay things by several years. But the outcome is scarcely in doubt.
This is more than a statistical story. It is the end of the Age of America. As a bond strategist in Europe told me two weeks ago,
“We are witnessing the end of America’s economic hegemony.”
We have lived in a world dominated by the U.S. for so long that there is no longer anyone alive who remembers anything else. America overtook Great Britain as the world’s leading economic power in the 1890s and never looked back. And both those countries live under very similar rules of constitutional government, respect for civil liberties and the rights of property. China has none of those. The Age of China will feel very different.
Victor Cha, senior adviser on Asian affairs at Washington’s Center for Strategic and International Studies, told me China’s neighbors in Asia are already waking up to the dangers.
“The region is overwhelmingly looking to the U.S. in a way that it hasn’t done in the past,” he said. “They see the U.S. as a counterweight to China. They also see American hegemony over the last half-century as fairly benign. In China they see the rise of an economic power that is not benevolent, that can be predatory. They don’t see it as a benign hegemony.”
The rise of China, and the relative decline of America, is the biggest story of our time. You can see its implications everywhere, from shuttered factories in the Midwest to soaring costs of oil and other commodities. Last fall, when I attended a conference in London about agricultural investment, I was struck by the number of people there who told stories about Chinese interests snapping up farmland and foodstuff supplies — from South America to China and elsewhere.
This is the result of decades during which China has successfully pursued economic policies aimed at national expansion and power, while the U.S. has embraced either free trade or, for want of a better term, economic appeasement.
“There are two systems in collision,” said Ralph Gomory, research professor at NYU’s Stern business school. “They have a state-guided form of capitalism, and we have a much freer former of capitalism. What we have seen, he said, is “a massive shift in capability from the U.S. to China. What we have done is traded jobs for profit. The jobs have moved to China. The capability erodes in the U.S. and grows in China. That’s very destructive. That is a big reason why the U.S. is becoming more and more polarized between a small, very rich class and an eroding middle class. The people who get the profits are very different from the people who lost the wages.”
The next chapter of the story is just beginning.
U.S. spending spree won’t work
What the rise of China means for defense, and international affairs, has barely been touched on. The U.S. is now spending gigantic sums — from a beleaguered economy — to try to maintain its place in the sun. See: Pentagon spending is budget blind spot .
It’s a lesson we could learn more cheaply from the sad story of the British, Spanish and other empires. It doesn’t work. You can’t stay on top if your economy doesn’t.
Equally to the point, here is what this means economically, and for investors.
Some years ago I was having lunch with the smartest investor I know, London-based hedge-fund manager Crispin Odey. He made the argument that markets are reasonably efficient, most of the time, at setting prices. Where they are most likely to fail, though, is in correctly anticipating and pricing big, revolutionary, “paradigm” shifts — whether a rise of disruptive technologies or revolutionary changes in geopolitics. We are living through one now.
The U.S. Treasury market continues to operate on the assumption that it will always remain the global benchmark of money. Business schools still teach students, for example, that the interest rate on the 10-year Treasury bond is the “risk-free rate” on money. And so it has been for more than a century. But that’s all based on the Age of America.
No wonder so many have been buying gold. If the U.S. dollar ceases to be the world’s sole reserve currency, what will be? The euro would be fine if it acts like the old deutschemark. If it’s just the Greek drachma in drag … not so much.
The last time the world’s dominant hegemon lost its ability to run things singlehandedly was early in the past century. That’s when the U.S. and Germany surpassed Great Britain. It didn’t turn out well.
IMF and the World Bank Destroying Countries
The IMF/World Bank are systematically tearing nations apart. It’s not privatization. They steal from the people and hand it over to themselves. The World Bank/IMF pays off politicians to transfer a nation’s water systems, railways, telephone companies, nationalized oil companies, gas stations, etc. to IMF-backed transnational companies, which they later destroy after transferring the assets to dummy corporations.
By Richard Salbato, UnityPublishing.com
March 22, 2002
The World Bank/IMF is owned and controlled by NM Rothschild and 30 to 40 of the wealthiest people in the world. For over 150 years they have planned to take over the world through money.
The former chief economist of the World Bank, Joe Stiglitz, was fired recently. He pointed out to top executives that every country in which the IMF/World Bank is involved has ended up with a crashed economy, a destroyed government, and sometimes in flames with riots.
Before Joe Stiglitz was fired, he took a large stack of secret documents out of the World Bank. These secret documents from the World Bank and the International Monetary Fund reveal that the IMF required nations:
to sign secret agreements of 111 items
in which they agreed to sell off their key assets — water, electric, gas, etc.
in which they agreed to take economic steps which are really devastating to the nations involved
in which they pay off the politicians billions of dollars to Swiss bank accounts to do this transfer of a countries fixed assets
If they do not agree to these steps they are cut-off from all international borrowing. Today no one can survive if they can’t borrow money in the international marketplace, whether you are people or corporations or countries. If that does not work, they overthrow the government and plant lies about the former government and/or even rewrite history.
The Argentina Plan
Inside documents from Argentina show the secret Argentine plan. This is signed by Jim Wolfensen, the president of the World Bank. Argentina has had six presidents in five weeks because their economy is completely destroyed. 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, like their water system. Then they taxed the people.
They created big government and big government handed it off to the private IMF/World Bank. They pay off the politicians billions in Swiss bank accounts.
The Enron Connection
The water system of Buenos Aires was sold off for a song to a company called Enron. A pipeline that runs between Argentina and Chile was sold off to Enron.
Then the globalists blew out Enron after transferring the assets to another dummy corporation.
They come in, pay off politicians to transfer the water systems, the railways, the telephone companies, the nationalized oil companies, gas stations, etc. — the politicians then hand it over to the IMF for nothing. The Globalists pay off politicians individually, billions a piece in Swiss bank accounts.
The plan is total slavery for the entire population. Enron is a dummy corporation for money laundering, drug money, etc.
IMF Planed Riots
The IMF/World Bank are systematically tearing nations apart, whether it’s Ecuador or Argentina. It’s not privatization. They steal it from the people and hand it over to the IMF/World Bank.
They hand it over, generally to the cronies — like Citibank grabbed half the Argentine banks. British Petroleum grabbed pipelines in Ecuador. Enron grabbed water systems all over the place.
The problem is that they are destroying these systems as well. You can’t even get drinking water in Buenos Aires. 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.
And the IMF just got handed the Great Lakes. They have the sole control over the water supply now.
The IMF and the World Bank is 51% owned by the United States Treasury.
Every country IMF/World Bank has meddled in, they have destroyed and the economies ended up in flames.
They even plan the riots. They know that when they squeeze a country and destroy its economy, you get riots in the streets. And they admit that it an IMF riot. Because you have riot, all the capital runs away from your country and that gives the opportunity for the IMF to then add more conditions.
California Utilities & Enron
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 America. The chief investigators of Enron for the State of California said that 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.
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.
According to the investigations, they are telling me that California’s electric bills were pumped up unnecessarily by 9 to 12-billion dollars. California’s paid, but I don’t know who they are going to get it back from now. 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.
Enron’s Auditor – Lord Wakeham
The men who designed the system in California for deregulation then went to work for Enron right after.
Lord Wakeham, who was on the audit committee of Enron, is the head of NM Rothschild. There isn’t anything that he doesn’t have his fingers in. He’s on something like fifty Boards. And he was supposed to be head of the audit committee watching how Enron kept the books. 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 in Britain.
Enron owned a water system in the middle of England. This is what Lord Wakeham approved and then they gave him a job on the board. On top of being on the board, they gave him a huge consulting contract. Lord Wakeham is supposed to be in charge of the audit committee to see how they were handling their accounts, but he is also the head of the board to regulate the media.
Lord Wakeham is trying to pass laws in England where you can’t own your own water. He can’t be touched because he regulates the media.
Rothschild and the Illuminati
Burrow into NM Rothschild, you’ll find it all there: The IMF/World Bank implosion, how they bring down a country and destroy the resources of the people.
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 no one can pay. Then open up your borders to trade — complete free marketeering. Its like the opium wars. This isn’t free trade; this is coercion trade. This is war.
They are taking apart economies through this. China has a 40% tariff on the USA, but the USA has a 2% on them. That’s not free and fair trade. It’s to force all industry into a country that the globalists fully control, and they control China.
The Illuminati owns Wal-Mart and Wal-Mart has 700 plants in China. There is almost nothing in a Wal-Mart store that comes from the United States of America, despite all the eagles on the wall. They have big flags saying “Buy American” and there’s hardly anything from America in their stores.
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 Wal-Mart.
Sell off the water company and that’s worth, over ten years, let’s say about 5 billion dollars, ten percent of that is 500 million. A Senator from Argentina said that he got a call from George W. Bush in 1988 saying ‘give the gas pipeline in Argentina to Enron.’ Enron was going to pay one-fifth of the world’s price for their gas. The Argentine Senator asked ‘how can you make such an offer?’ The answer was that if they only pay one-fifth that leaves quit a little bit for you to go in your Swiss bank account. This is the same George W. Bush who said he didn’t get to know Ken Lay of Enron until 1994. Now they are having these white-wash hearings.
Bill Clinton, 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.
Argentina is an example of step two of the IMF. 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.
Now if you cut the economy in the middle of a recession (created by the IMF), you absolutely demolish the nation.
You don’t start cutting the budget in a recession: you start spending money to stimulate the economy. You don’t raise taxes, you cut them. But they tell these countries you’ve got to cut, and cut, and cut. Why? Well, 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.
Part 3 and Part 4
Then they open up the borders for trade; that’s the new opium wars. They destroy an economy so that it can not produce anything, and then open the borders to sell their own goods.
They force nations to pay horrendous amounts for things like drugs, legal drugs. 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 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?
In Part 4, they take apart the government by the coup d’etat and they install their own corporate government. In Venezuela where they have an elected president of the government, the IMF has announced 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 saying is: 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 anything. He said what I’m going to do is 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 he did that, they started fomenting trouble with the military. And watch this because 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.
Bush Administration Signals End to Open Government
1) The Bush administration invoked executive privilege to keep Clinton-era documents secret. The move shocked Republican lawmakers. Why would Bush want to cover up for Bill Clinton? Representative Dan Burton, who is the Chairman of the House Government Reform Committee, even threatened to hold Bush in contempt of Congress unless he releases several sets of subpoenaed Justice Department documents that he has hidden. It does not matter. Bush promises to never comply with congressional investigators. Bush is determined to keep Clinton’s crimes concealed.
2) Bush flatly refuses to hand over records of internal energy task force meetings. These records could either incriminate or exonerate Bush and Vice President Dick Cheney regarding allegations of conflict of interest in the Enron scandal. Even the General Accounting Office is suing the White House (a first) to obtain the records. Again, Bush refuses to comply. The president is even willing to ignore court orders demanding the release of documents.
3) Just this week, the United States Government’s top lawyer told the U.S. Supreme Court that officials have the right to lie to American citizens. No, he did not explain how that assertion jives with Bush’s Christian testimony.
4) Two days ago, the White House ordered all federal agencies to delete their web sites of all “sensitive information.” The White House did not say what information it considered “sensitive.”
5) Vice President Cheney is already the stealthiest Vice President in U.S. history. Seldom does anyone know where he is or what he is doing.
6) President Bush admitted to forming a mysterious “shadow government” comprised of unknown persons who are living in underground bunkers at secret sites outside Washington, D.C. Not even top legislators know who these people are or what instructions have been given them. Furthermore, how does a “shadow government” mesh with the U.S. Constitution? These questions have never been (and never will be) answered.
When asked by a reporter about these and other matters, Bush said,
“I have a duty to protect the executive branch from legislative encroachment.”
Congress, for the most part, only learns of Bush’s clandestine carryings-on as brief sketches leak out in the press.
However, none of this seems to bother the American people or members of the press. Bush is a wartime president (even though no one officially declared war) and, therefore, can do anything he pleases with total impunity. In truth, the Bush administration signals the end to both open government and constitutional government — and few people seem to even notice.
Christians cannot comment on Government in USA
Congress has decided to silence you, me, and any other Christian who dares express a moral view that may impact a political campaign! The U.S. House of Representatives and the Senate have both passed a so-called “campaign finance reform” bill … and now President Bush has said he will sign it into law! In spite of all the propaganda in the media, this legislation actually silences Christian and conservative organizations — banning them from commenting on key moral issues during election campaigns … while allowing the liberal media to speak out freely.
This new law is a SLAP IN THE FACE to our right to free speech. It is absolutely, blatantly UNCONSTITUTIONAL!
This legislation effectively strips church and conservative leaders and organizations of religious free speech during elections.
For me or any other conservative spokesperson to comment and inform you with a Christian perspective would be illegal … and the threat of jail a reality!
Even your own pastor cannot inform you on key political and moral issues when it comes time to vote!
So where will you get all your information about the political and moral views of candidates? FROM THE BIASED, SECULAR MEDIA!
From The Wilderness Publications, http://www.copvcia.com, see a related article on how scientists and academics are viewing the possibility of reducing the world’s population by more than four billion people and doing so selectively with DNA biological weapons. See how hundreds of microbiologists are being assassinated world-wide to keep this plan in the hands of only a few people. [www.rense.com, http://www.narconews.com]
The G20: The New Ruling Aristocracy of the World?
Share the World’s Resources
The finance ministers and reserve bank governors of the G20 countries gather with leading International Monetary Fund (IMF) and World Bank officials. They tell us that these politicians come to create a better world for us. The biggest joke of all is that they will expect us to believe this lie. Of course, if you look past the superficial pomp, glitz and sheer propaganda that are part of their gatherings, you will find that a better world is not being created for us; a better world is being created for the global elite and their transnational companies to our detriment.
The G20 only cares about economic growth for the richest companies on earth; they really don’t care about us — we are inconsequential to them until we rise up in protest. Indeed, at their meetings the G20 will be formulating plans to further exploit the workers and poor of the world to produce more wealth for transnational companies and their greedy capitalist owners.
The G20’s Composition and Agenda
The G20 comprises of the 20 biggest economies in the world, in the form of the US, the UK, Germany, France, Italy, Canada, Russia, Japan, South Africa, China, Brazil, Australia, Argentina, India, Indonesia, Mexico, Saudi Arabia, South Korea, and Turkey. Together these countries account for 90% of the world gross product and over 80% of world trade. Added to this, with their combined voting power in the IMF and the World Bank, these countries completely dominate these institutions. Indeed, the President of the World Bank and Managing Director of the IMF are required to attend all the G20 meetings.
The G20 was established by the G8 in 1999 in the wake of the Asian economic crisis. At the time of the Asian financial crisis, some of the largest economies in the South came under speculative attack, for which neo-liberal policies such as financial liberalisation had created the space. When the crisis initially broke, billions of dollars were wiped out in a matter of hours and it threatened to spread to the countries of the North.
Indeed, the Asian economic crisis shook the most powerful countries and economic institutions, such as the IMF and the World Bank, to their core. It actually endangered the entire neo-liberal global project that had been formulated to supposedly overcome the crisis that capitalism had first began to experience in the 1970s, which was and is based on the problem of over-accumulation of capital.
To shore up the neo-liberal system, the giants of the G8, led by the United States, realised that they needed to further draw in the biggest countries of the South, such as South Africa, India, China, and Brazil into the global financial governance system. The G20 was one attempt to do this and in effect rescue the global neo-liberal agenda, which had been — and still is — so favourable to the interests of transnational companies.
The G20’s self-stated purpose is to meet annually to discuss policies that will promote continuous high economic growth for transnational corporations across the world, whilst at the same time attempting to limit any possible financial crisis that may pose a threat to high economic growth. To do this, the G20 has opted to promote neo-liberal globalisation even further.
The most important document that has been produced by the G20 so far is the Accord for Sustained Growth. It outlines the policies that the G20 countries aim to promote in order to create an environment in which the largest companies in the world can maintain high growth.
One of the most important pillars of the G20’s Accord for Sustained Growth is financial liberalisation. As such, the G20 has called for countries across the world to further open up their economies to capital flows. The goal of this is to increasingly allow companies to move money in and out of any economy in the world.
Thus, the G20 wants to entrench an environment where corporations can look for countries and areas of investment that offer the highest rates of return. This includes allowing companies to buy assets in any country and speculate on any stock market in the world.
Of course, financial liberalisation has already spawned speculation on currencies and stock markets on an unprecedented scale, which in turn has created financial volatility and increased the likelihood of another financial crisis. Due to the fact that the G20 believes in financial liberalisation, their answer to this increased financial volatility is not for countries to impose financial controls to stop speculation but rather for countries to build up their currency reserves and strengthen their capital markets.
The G20 countries, including South Africa, believe that countries could use these reserves to defend their currencies and stock markets when they are attacked by speculators. Building up reserves means that countries have to divert money away from social spending. Thus, the G20 countries believe that speculation should be allowed to continue, and its negatives effects, such as currency and stock market crashes, should be borne by the poor, who will lose further social services so that vast reserves can be built up to defend currencies and stock markets when the corporate speculators descend on them.
Through the Accord for Sustained Growth, the G20 has also called for all countries to advance the privatisation of state-owned assets and public services. This creates further investment opportunities for transnational corporations, who can now swoop into the countries of the South and buy up the ex-state owned assets that offer the best possibilities for future profiteering.
In fact, under South Africa’s chairmanship, the G20 has been pushing countries to privatise state assets at an increasingly rapid rate in order to use the money received from this to service debts to the IMF, the World Bank, and private Northern banks. Since much of the debt owed by the South is illegitimate, this call for the countries of the South to sell their public assets to pay the IMF, the World Bank and Northern private banks is especially sickening.
It will translate into a situation where people across the globe will lose the few remaining social services that they still have so that the Northern private banks can grow richer.
The G20 countries have also sought to assist the largest transnational corporations to increase their profits in a variety of other ways. The G20 has promoted policies to create a flexible labour market on a global scale. In other words, the G20 are promoting policies that strip workers of their few remaining rights so that corporations can pay them less and less and thereby drive up their profit rates.
Along with this, the G20 has implemented policies that are aimed at protecting the intellectual property rights (IRPs) of corporations, including patents on medicines. In doing so, the message being sent by the majority of the G20 countries is that the interests of transnational corporations are more important than people’s lives.
Through the Accord for Sustained Growth, the G20 countries have also committed themselves to implementing and furthering trade liberalisation. Indeed, all of the G20 countries are firm believers in free trade because it is the transnational companies that are based within their territories that benefit from free trade regionally and globally. For this reason, the G20 countries have used the G20 meetings as a forum to discuss how they could collectively kickstart the stalled WTO negotiations. In fact, the G20 countries are the driving force within the WTO: they are the ones that have driven the entire WTO process through the exclusive green room meetings in which they participate to the exclusion of smaller countries of the South.
At their meetings, the G20 will also be discussing the possibility of implementing a number of reforms within the World Bank and the IMF. However, the reforms that have been suggested by the G20 countries are only superficial. The largest countries of the South involved in the G20, such as South Africa, Brazil, China, and India, want to reform the World Bank and the IMF in order to receive greater voting rights for themselves within these institutions. They have, however, not called for equal voting rights for all countries in IMF and the World Bank, which is significant. In effect, this means that South Africa, Brazil, China, and India are still willing to deny larger voting rights for smaller nations within the IMF and the World Bank.
It, therefore, appears as if these G20 countries wish to use the G20 to push for greater voting rights for themselves in the IMF and the World Bank so that they can join the older imperial powers in using these institutions to promote the expansionary agendas of their own capitalist elite. Certainly the reforms that are proposed by the G20 countries regarding the IMF and the World Bank have not extended to questioning the neo-liberal policies these institutions have forced upon poorer nations of the South. This is because all of the G20 countries are firm believers in neo-liberal economics.
In fact, the G20 countries have openly stated that as part of the proposed IMF and the World Bank “reform” process, the control that these institutions have over smaller countries’ economies should be strengthened. This would entail the further imposition of neo-liberal economic policies on smaller countries.
It is telling that the G20 countries, especially South Africa, India, and Brazil, wish to extend the powers and reach of the IMF and the World Bank at the very moment that these institutions have lost much of their power and credibility in the South. Indeed, the IMF and the World Bank, and the neo-liberal agenda that they push, are being openly challenged by countries such as Venezuela, Cuba, Bolivia, and Ecuador. The defence that G20 countries, such as South Africa and Brazil, have mounted on behalf of the IMF and the World Bank clearly demonstrates that these countries are far more aligned with the older imperial powers than they are with progressive countries, such as Venezuela and Ecuador.
The Consequences of the Policies Pushed by the G20
The consequences of the neo-liberal policies that have, and are, being pushed by the G20 countries are familiar: the rich are getting richer and the poor are getting poorer. While most of the G20 countries are now richer than ever under neo-liberal globalisation; as many as 80 other countries are now poorer than they were in the 1970s.
Although trade has increased under the global neo-liberal ‘free’ trade regime, it has only been an elite who have benefited. The portion of exports from the poorest countries has declined markedly. In fact, the poorest 48 countries now only account for 0.4% of global exports. This is because the industries in these countries have been destroyed by imports flooding in under the banner of ‘free’ trade. All of this translates into a world of growing inequality: a world where the richest 400 people, the new global capitalist aristocracy, now have more money than the poorest 3 billion people combined.
While companies have made massive profits due to neo-liberal policies that are promoted by the G20 countries, the people of the world have suffered. Due to privatisation, billions of people have lost all access to social services, such as education, water, sanitation, and healthcare. This is because, in most countries, these services are now being sold by private companies as commodities: if you can’t afford to pay for such services, you don’t get them! The macabre result: over 1 billion people have lost access to clean drinking water; 2.6 billion people lack basic sanitation; over 1 billion people are illiterate; 820 million people suffer from malnutrition; over 1 billion people lack access to any form of healthcare; and 30 000 children die every day from poverty.
This takes place in a world where the amount of money spent by American and European companies on entertainment each year could give every person in the world access to enough food, proper healthcare, basic education, and clean water.
The Reasons Why the G20 Emerged
The event that led to the formation of the G20 was the Asian financial crisis. However, the actual reasons why the G20 was formed are more systemic and relate to the steady decline of US imperial power and the growing breakdown of US hegemony — the Asian crisis was simply the catalyst for the formation of the G20, not the reason why it was formed.
Since the early 1970s, and the beginning of the global capitalist crisis, the US’s global economic dominance and hegemony has been on the decline. In 1950, the US supplied 50% of the world’s gross product; by 2003 this had dropped to 20%. In 1950, 60% of all manufactured goods were produced in the US, today only 20% of manufactured goods derive from the US. Non-US companies now dominate most of the industries in the world. For example, 9 of the 10 largest electronics companies, 8 of the 10 largest car manufacturing companies, 7 of the 10 largest oil companies, and 19 out of the 25 largest banks in the world are non-American. Since 2002, the US has also been paying out more to foreign investors than it has received from its investments abroad. This, along with declining exports, has seen its current account deficit balloon.
As early as the mid-1970s, the global position of the US state and capital was declining and that they were losing market share and economic power to other imperial countries, such as France, Germany, the United Kingdom, and Japan. Certain sections of US capital realised that the growing importance of countries such as Japan and Germany, along with decline of the US, could spark inter-imperial rivalry on a global scale, which would be detrimental to the capitalist system as a whole.
Some of the most important sections of the US capitalist class have been firm believers that the largest capitalists across the globe have a common interest in ensuring that there is a stable global environment that favours capital accumulation, even though they may compete with one another as individual capitalists. Thus, these influential US capitalists believe that the most powerful capitalist states should work together to create a global environment that favours the interests of the most powerful corporations in the world.
The influence that this section of US capital exerted over the US state led to the US forming the G7 in 1978. The formation of the G7 was aimed at persuading Western Europe and Japan that the US was willing to work with other capitalist powers to create a global environment that would favour the interests of all of the most powerful capitalists. On this basis, and through the G7, a collective imperialism was formed, which was headed up by the US, but included lesser imperial powers like the United Kingdom, France, Germany, Italy, Canada, and Japan.
By the 1990s a number of countries in the South had also begun to emerge as regional imperialists. For example, since the 1990s, sections of Brazilian capital, with the assistance of the Brazilian state, have been rapidly expanding into other Latin American countries. In East Asia, China has emerged as a major player and now looks set to rival the US globally. Similarly, South Africa has emerged as a regional imperialist in Africa. The South African state has been working hand in glove with South African corporations to assist them to expand into other African countries. This has seen South Africa becoming the largest foreign direct investor in Africa.
With countries such as South Africa, Brazil, India, Australia, and China emerging as regional powerhouses, the US was faced with a further devolution of its power in the regions where these countries were and are acting as imperialist powers. Again the US indicated to these countries that it would be willing to cooperate with them. In doing so, the US co-opted South Africa, Brazil, and India into the collective imperial system that it had created with lesser imperial powers like the UK, Germany, France, etc. It did this in a number of ways. For example, South Africa, China, Brazil, and India were welcomed into the inner circles of the World Economic Forum.
The World Economic Forum has been one of the central institutions through which capitalists and leaders from the South have been inducted into the emerging global capitalist aristocracy. Along with this, regional emerging imperialists, such as South Africa, were drawn into the centres of power in the WTO, the IMF, and the World Bank. Similarly, the G20 was established to entice the emerging regional imperial powers into the global collective imperial system. The aim of this was to ensure global stability so that a climate which favours capital accumulation globally could be assured. Of course, the new regional imperial powers like South Africa have not joined as equal partners; they are lesser partners in the global collective imperial system. This can be seen by the fact that the G20 is not yet a highly formal structure like the G8.
Despite acting as a collective globally, through such institutions as the G20, each of the powers involved in the collective imperial system has its specific region of the world in which it operates as the prominent imperialist power to further its own capitalist entities interests. For example, the US’s main strategic imperialist spheres are Latin America, the Middle East, parts of Africa, and parts of Asia; while Britain’s imperialist ambitions are mainly restricted to some of its ex-colonies.
Similarly, South Africa’s imperialist sphere covers much of sub-Saharan Africa. As a result, where two or more imperial powers’ interests clash in a certain region or country, they will compete in that region or country, even though globally they will remain aligned through institutions such as the G20 and the World Economic Forum. Hence, although not in conflict globally, in certain areas in Africa, South African, British, and US interests do clash. This, however, does not preclude South Africa, Britain, and the US from working together in other areas of Africa where they have common interests.
Within the collective imperial system, the various countries continuously jostle to increase their powerbases. Specifically, under George Bush Jr, the US has acted unilaterally on a number of occasions to strengthen its leadership position within the global collective imperial system. It has targeted strategically located countries such as Iraq, Iran, North Korea, and Zimbabwe through military actions and sanctions. Such actions were not just directed at these countries — they were actually warnings to the regional and global imperial powers located close to these countries or with interests in these countries, such as the EU, Russia, China, and South Africa.
For example, the US invasion of Iraq was aimed at seizing oil interests in Iraq for US companies to the detriment of European oil companies. Added to this, the military attack on Iraq was also meant as a veiled warning to the European powers not to openly challenge the US’s leadership role in the global imperial system.
Such action by the US has even extended into a bid to gain global dominance as the sole imperial power. However, because of its declining economic and political power, the US has failed dismally in these actions. It has become bogged down in a war in Iraq, which it is losing. It has also failed to intimidate North Korea into submission and thereby undermine China’s power. Similarly it has also failed to get rid of the ZANU-PF in Zimbabwe, which was aimed at curbing South Africa’s imperial influence and power in sub-Saharan Africa.
By undertaking these actions, and failing to reach its goals, the US has found itself in a serious crisis. Due to these failures its leadership position in the global collective imperial system has been further eroded.
As a result of the costly wars it is waging, the US is now borrowing at an unprecedented rate: its debt now stands at over $9 trillion. Most of this debt is owed to countries such as China, Russia, India, Brazil, and South Africa. If the dollar continues to weaken, there is a real danger for the US that these countries will withdraw the money that they have invested in US bonds. If this happens, the US economy will be in severe crisis and may even experience an economic meltdown, which will have knock-on effects globally.
At this point the US is at a crossroads. It can try and maintain its leadership position through military might: abandon initiatives such as the G8, the G20, and the World Economic Forum, and attack the emerging regional and global imperial powers militarily and/or economically. This is an unlikely option. Iraq has proved that despite all of its high tech weapons the US is militarily over-stretched. It could not fight wars on multiple fronts like the British Empire of old.
Added to this, a global imperial war — along with the trade barriers that would accompany it — are not in the interests of the biggest US transnational companies. The largest transnational companies, and their global capitalist owners, want a global neo-liberal free trade regime. They need such a global free trade regime to function as truly transnational companies and maximise their profits.
The other option that the US has — to deal with its declining power — is to further broaden and strengthen the global collective imperial system. This would perhaps involve replacing the G8 with the G20 and granting the reforms in the IMF and the World Bank that have been demanded by China, South Africa, India, and Brazil. This would also further undermine the US’s power, but it would further bind the global elite in the G20, and their project, together. Such an option is actually favoured by some sections of the US capitalist elite, and seems the most likely path the US will follow.
Even if the G20’s power is increased, and the global collective imperial system is strengthened, there are no guarantees that capitalism will not experience a massive crisis in the future. Neo-liberalism has created a form of capitalism that is volatile, highly unstable, and susceptible to crises. Added to this, capitalism has created an unprecedented environmental crisis.
The meetings of the G20 are meetings of the global elite. Despite the rivalries between the countries involved, they have proven and continue to prove a willingness to work together to force neo-liberal economic policies on the people of the planet.
The aim of such policies is to maximise the profits of the largest transnational corporations in the world. Like the US, the people of the world also face a choice. We can sit by and watch the G20 — along with the other forums that the collective imperial powers use — push through neo-liberal policies, or we can join together and resist.
We can join hands with the movements that have emerged across the world, like the Zapatistas, to struggle against neo-liberal capitalism and the collective global imperial system. We can also join with the countries — like Venezuela and Ecuador — that have used the decline of the US to embark upon a path away from capitalism.
The choice is ours: we can choose to struggle to make another world possible or we can sit in silence and let the likes of Trevor Manuel and his allies in the G20 do what they want.
Building the NWO by Stealth
Once the City of London (the financial sector within London) used British Military Forces to carve out a physical empire for the British East India Company and the bankers. Nowadays the ruling Venetian oligarchy and its Khazar Monarchy is dividing and conquering the world by a different form of imperialism. Globalization.
It has been estimated that the Monarchy presently dominates over 90% of the present international financial system. The money-power has long been transferring its wealth from paper to hard assets in order to position itself to rule following the complete collapse of the financial structure. Control of resources, trade, financial markets, currency and commodity prices have enabled asset-stripping, sometimes by destroying national economies as in Russia and Asia, or through commanding debt-reduction strategies involving privatization of state assets like banks, airlines and water utilities as in Australia.
The final objective in globalization is world depopulation and a return to serfdom as directed by UN and national policies in place since at least the 1980’s.
The UN is an agency for legitimizing and enforcing the designs of the City of London for their planned NWO. By dividing a nation so as to gain a foothold in some strategic area they can destabilize that nation, bringing it under economic restraint or blackmail by the IMF and World Bank. Then UN “peacekeeping” troops can occupy the troubled region indefinitely, making as it were, a UN colony defended by “the rest of the world” team in behalf of what Benjamin Disraeli called the “Hidden Hand”.
The IMF is “bag man” for the International Bankers. It assembles guarantees and collateral from nations like Australia, whose leaders are controlled by the City, in order to salvage the bad debts of private banking consortia when nations default. And it ensures collection of usury by enforcing “conditionalities,” which, if ignored, can mean the boycott of international credit.
The Australian League of Rights stated in their weekly Newsletter, On Target (Vol.35, No.37 – September 24, 1999),
“East Timor is merely the most recent of a long list of countries destroyed by the apparent inaction of the United Nations. And it is not the first time Clinton has stood by and refused to commit Combat Troops that could have prevented the slaughter of thousands of innocent people. Populations the length and breadth of Africa have been decimated with exactly the same treatment.”
(Half of all newborn babies in Africa have AIDS, a disease made by the USDOD and distributed in Africa by WHO vaccinations. Average life expectancy for these newborn babies will be 25 years, the continent will be depopulated as planned and control or resources will revert to the oligarchy through their presence and geopolitical predominance).
“Another independent nation threatened by the actions of the International Monetary Fund and the World Trade Organization (formerly GATT), both part of the United Nations and the evolving ‘World Government’, is Taiwan.”
“The purpose of the UN force currently taking control (in East Timor) is explained by UN spokesman David Wimhurst: “that mission includes as everybody knows the eventual formation of transmission of administration which would allow at some point East Timor to become independent.”
“Independent” in this context means independent only of Indonesia. The UN is the political and military arm of the World Bank. The essential criterion for East Timor to achieve independent nation status is that it submits to becoming a subsidiary of the World Bank. The people were allowed a referendum on whether they wanted to be free from Jakarta, but they will never be allowed a say in their relationship to the debt merchants.
“ABC news reports that the World Bank says it is ready to “offer” financial help to rebuild East Timor. “Bank president James Wolfensohn says a team will be sent to the territory as soon as it is safe. Mr. Wolfensohn continues ‘the people that will be running the (reconstruction) program… will be the UN, but subject to what the UN decides, I think we will certainly be trying to work with and embrace the East Timorese. And I would expect that representatives of the potential East Timorese government will in fact be in Washington in the next several days and we will be ready to talk to them.'” They are currently talking to East Timor’s independence leader, Xanana Gusmao.”
“In scenes reminiscent of John Howard’s first days as Prime Minister, if Mr. Gusmao says what the UN wants to hear, and signs the fledgling state into eternal debt bondage, he will be allowed to become head of state. If not, agreeable replacements will be swiftly and professionally vetted. Nothing will be left to chance on this issue. Disraeli wrote over 100 years ago that the world is run by people very different to those that most people are aware of.”
“It is an illusion also that East Timor is reliant on the World Bank for its reconstruction. The reconstruction of East Timor is reliant on the physical amount of the natural resources and technology available to it. The finance system is a man-controlled one which should not be allowed to restrict these physical realities” (end of On Target quote).
US Secretary of Defense, William Cohen said in Jakarta today, that unless Indonesia disarms the militia, prosecutes those responsible for the violence and stops the massacres in East Timor, the US will do severe damage to Indonesia.
We should view events in East Timor as a continuation of what has happened in Kosova. The City of London created the situation in East Timor to splinter Indonesia, the world’s fourth most populous nation, and in the process pick-up the vast oil, gas and mineral riches of the Timor Sea as they position themselves to maintain power following the collapse of world currencies.
Until the Asian Economic Meltdown was inflicted in 1997, Indonesia was prospering, with a national oil, industry, manufacturing, forestry and mining development and a poverty rate lower than the US. Within six-months the economic gains achieved in the previous 25 years were lost when at the insistence of lackies of the City of London in the Australian government, and the pro-IMF oligarchy installed through US efforts in 1965, the nation capitulated to the IMF.
It now becomes clear that the Timor Gap Treaty, whereby one man, ex-Foreign Minister Gareth Evans, granted Indonesia sovereignty over hundreds of billions of dollars worth of proven oil and gas reserves, was a conspiracy. We see now the Senator’s loyalties lay with the City of London who plan to hold the world’s resources in a NWO. Doubtless he has purchased the reward he has long coveted, of high office with the UN (at US$300,000.00) following his resignation from the Australian Parliament last week (with a A$2.3 million Superannuation payout).
And Prime Minister John Howard’s complicity as an agent of the City is demonstrated by Australia’s call for a referendum in East Timor after helping to make it an economic cripple by enticing it into IMF conditionalities following the Asian Economic Meltdown.
Small wonder Indonesian troops inflicted a scorched earth policy in East Timor. Their government know they have been betrayed by Australia. When Indonesia accepted IMF help it destroyed their economy and their society. By withstanding ex-Prime Minister Paul Keating’s bullying tactics, Dr. Mahathir rejected the IMF and Malaysia has prospered. On the other hand, Kosova was destroyed and given to drug lords and criminals because Yugoslavia was independent of the IMF and refused to privatise state assets. As with World War II, the strategy behind the aggression against Serbia is for the break-up of Russia.
There was more than altruism behind John Howard’s guaranteeing a bankrupt Indonesia to the IMF with Australian surety. If would be drawing a long bow to suppose John Howard was unaware of his part in this plan to break-up that nation for the benefit of the City. Now he is supervising — with the lives of Australian soldiers as surety.
The current edition of The Philadelphia Trumpet compares Australia’s army with “Dad’s Army” of the 1970’s British TV comedy series. It exposes Australia’s defense unpreparedness and the dismantling of the Australian Security and Intelligence Organization (ASIO) by successive Fabian socialist governments since 1972 and quoting The Bulletin (August 3), rehearses “a decade of disastrous intelligence and economic judgments at bureaucratic and academic levels” with intelligence bungling and constant failure to foresee situations before they arise.
According to On Target, Australia’s Defense spending has averaged 1.9% of GDP whereas ABC Radio National today estimated that Australians spend 1% of GDP purchasing marijuana.
Keep listening to see if International Narcotics, a common denominator associated with recent conflict in Kosova, Colombia, Chechynia, Turkey, Afghanistan, Kurdistan and Dagestan turns out to be an important factor in the East Timor situation. Drug money laundering through City of London-controlled banks provides an important sounce of physical cash (as distinct from electronic funds) is big business, and when you say IMF think drugs.
Strauss-Kahn Screws Africa
By Greg Palast, The Guardian
May 20, 2011
Now that I’ve dispensed with the obvious and obnoxious teaser headline, let’s drop the towel and expose Dominique Strauss-Kahn’s history of arrogant abuse. The truth is, the grandee of the IMF has molested Africans for years.
On Wednesday, the New York Times ran five – count’em, FIVE – stories on Strauss-Kahn, Director-General of the International Monetary Fund. According to the Paper of Record, the charges against “DSK,” as he’s known in France, are in “contradiction” to his “charm” and “accomplishments” at the IMF.
Au contraire, mes chers lecteurs.
Director-General DSK’s cruelty, arrogance and impunity toward African and other nations as generalissimo of the IMF is right in line with the story told by the poor, African hotel housekeeper in New York City.
Let’s consider how the housekeeper from Guinea ended up here in New York. In 2002, this single mother was granted asylum. What drove her here? It began with the IMF rape of Guinea.
In 2002, the International Monetary Fund cut off capital inflows to this West African nation. Without the blessing of the International Monetary Fund, Guinea, which has up to half the world’s raw material for aluminum, plus oil, uranium, diamonds and gold, could not borrow a dime to develop these resources.
The IMF’s cut-off was, in effect, a foreclosure, and the nation choked and starved while sitting on its astonishing mineral wealth. As in the sub-prime mortgage foreclosures we see today, the IMF moved quickly to seize Guinea’s property.
But the IMF did not seize this nation’s riches for itself. Rather, it forced Guinea to sell off its resources to foreign corporations at prices much like the sale of furniture on the lawn of a foreclosed house.
The French, Americans, Canadians, Swiss (and lately, the Chinese) came in with spoons out and napkins tucked in under their chins, swallowing the nation’s bauxite, gold and more. In the meantime, the IMF ordered the end of trade barriers and thereby ruined local small holders.
As a result of the IMF attack, Guineans who could, fled for freedom and food. This week, then, marked the second time this poor African was molested by the IMF.
Now we have the context of how these two, the randy geezer of globalization and the refugee ended up, in quite different positions, in that New York hotel room.
Since taking over the IMF in 2007, erstwhile “Socialist” Strauss-Kahn has tightened the screws in an attempt to maintain the free-market finance mania that ruined this planet in the first place. [That’s worth a story in itself – and that’s coming. Our team has a stack of inside documents from the IMF that we will be releasing in my new book in the Fall.]
DSK’s lawyers say the relationship with the housekeeper was “consensual.” But DSK says that about all IMF agreements with nations over whom it holds life and death powers. That’s like saying a bank robbery is consensual so long as you don’t consider the gun.
Whether it was agreed-upon sex or brutal rape, it could only have been “consensual” in the same way that the people of Guinea consented to IMF-ordered financial rapine.
The Times article quotes an IMF crony of Strauss-Kahn saying DSK gets his way by “persuasion” not “bullying.” Tell that to the Greeks.
It was DSK who, last year, personally insisted on brutal terms for the so-called bail-out of Greece. “Strong conditionality” is the IMF term. Strauss-Kahn demanded not just a devastating cut in pensions and a deliberate increase in unemployment to 14%, but also the sell-off of 4,000 of 6,000 state-owned services. The DSK IMF plan allowed the financiers who set the financial fires of Greece to pick up the nation’s assets at a fire-sale price.
The Strauss-Kahn demands were not “tough love” for Greece: The love was reserved solely for the vulture bankers who received the IMF funds but were not required to accept one euro in lost profit in return. DSK, despite the advice of many, refused to ask the banks and speculators to reduce their usurious interest charges that were the root of Greece’s woes.
Requiring Greece to sell assets, drop trade barriers, and even end the rule that Greek ships use Greek sailors has nothing to do with saving Greece, but everything to do with DSK’s commitment to protect every banker’s balance sheet from unwanted violations.
I do not consider it a stretch to say that a predator in the bank boardroom suite assumes his impunity applies to the hotel suite.
Forensic economist and journalist Greg Palast, author of the New York Times bestsellers, Armed Madhouse and The Best Democracy Money Can Buy, has investigated the IMF and World Bank for BBC Television Newsnight and the Guardian Newspapers (London) and Democracy Now! (New York).
Former IMF Chief (and sexual predator) DSK gets the boot at a protest rally of more than 100,000 in Greece on May 29th
Flashback: The Big Privatisation Debate – African Experiences (Excerpt)
With the intensified push for economic liberalization by the IMF, World Bank and other creditor institutions, more and more African leaders are agreeing to privatize. Over the past decade, African governments, often under pressure from creditor institutions to act quickly, have sold off thousands of state-owned enterprises. – Privatization shifts gears in Africa, African Recovery, April 2000
Africa Policy E-Journal
November 13, 2002
…Beginning in the 1970s, and gaining momentum throughout the 1980s and 1990s, has been the global trend away from state ownership and control towards privatisation.
Recent studies on privatisation in several African countries have shown that:
Privatisation led to the loss of over 60,000 jobs in Zambia while several hundred thousand workers were retrenched in Ghana.
Privatisation led to increases in the price of services. In Zambia, a privatised bus company dramatically increased the bus fares and closed down unprofitable — mostly rural — bus routes. As a result many Zambians now walk many kilometres to their workplaces and schools because they can no longer afford the bus fares or because the buses no longer service the areas where they live.
In Nigeria the prices for Kerosene increased by 6,000% between 1985 and 1995. Postal and telecommunications services increased their prices by 2,500 – 5,000% during that period while electricity prices increased by 883%.
In Ghana the introduction of cost recovery programmes were part of privatisation and resulted in increased fees for health and education services. As a result, they became unaffordable for the poor.
In Zimbabwe, privatisation also led to retrenchments and increased prices for services. The Cotton Company of Zimbabwe, for example, reduced its workforce from 3,000 to 500 after privatisation.
Flashback: IMF Forces African Countries to Privatise Water
February 8, 2001
A review of IMF loan policies in forty random countries reveals that, during 2000, IMF loan agreements in 12 countries included conditions imposing water privatization or full cost recovery. In general, it is African countries, and the smallest, poorest and most debt-ridden countries, that are being subjected to IMF conditions on water privatization and full cost recovery.
Ironically, the majority of these loans were negotiated under the IMF’s new Poverty Reduction and Growth Facility (PRGF), says Sara Grusky from the Globalization Challenge Initiative [http://www.challengeglobalization.org]. The reform was announced with great fanfare in 1999 when IMF officials claimed that the new loan facility would re-focus the IMF’s controversial structural adjustment measures on activities that borrowing government’s would identify as leading to poverty reduction.
An example is tiny Sao Tome and Principe. The island government has been put under pressure to pursue the implementation of a public enterprise reform through privatization and liquidation of nonperforming public enterprises for which buyers cannot be found. Nine public enterprises will be privatised, including the water and electricity utility and the national airline (Air Sâo Tomé).
The objective is said to be “to increase access to safe drinking water through rehabilitation of the waterworks system,” according to the IMF.
Some 20 percent of the population does not have access to safe water at present, but this number could rise if market prices are set on the service.
Rather than contributing to poverty reduction, water privatization and greater cost recovery make water less accessible and less affordable to the low income communities that make up the majority of the population in developing countries. The alternative is to revert to unsafe water sources or more distant sources.
The most immediate impact of reducing the accessibility and affordability of water falls on women and children. Worldwide, more than five million people, most of them children, die every year from illnesses caused from drinking poor quality water.
“When water become more expensive and less accessible, women and children, who bear most of the burden of daily household chores, must travel farther and work harder to collect water — often resorting to water from polluted streams and rivers,” says Sara Grusky.
This is confirmed by Ghanaian activist, Rudolf Amenga-Etego of the non-governmental Integrated Social Development Centre (ISODEC), who was in Washington recently highlighting the implications of having the poor pay “market rate tariffs” for water in Ghana. The World Bank has been pushing decentralisation in Ghana since 1988 and Ghana’s Water Sector Restructuring Project is expected to be approved by the Bank’s Board of Directors this year.
“Where cost-recovery becomes the underlying policy, water will become unaffordable for many poor people in Ghana,” Amenga-Etego told the news agency IPS.
The significance of finding such a high number of conditions relating to water privatization and water cost recovery in IMF loans is twofold. First, in the hierarchy of international financial institutions the IMF is at the top. Compliance with IMF conditions enables governments to receive the “seal of approval” that permits access to other international creditors and investors. Thus IMF conditions weigh especially heavily upon borrowing governments.
Second, it is quite common that World Bank loans have, as their first condition, compliance with certain IMF conditions. This is known as “cross conditionality.” In the division of labor between the two institutions, it is the World Bank that has primary responsibility for “structural” issues such as the privatization of state-owned companies.
Therefore, it can be presumed that in every country where IMF loan conditions include water privatization or full cost recovery, there are corresponding World Bank loan conditions and water projects that are implementing the financial, managerial, and engineering details required for such ‘restructurings’, says Sara Grusky.
In Ghana, civil society has announced its intention to resist the privatisation pushed for by the World Bank. Figures from the Government of Ghana have shown that only 36 percent of the rural population have access to safe water and 11 percent have adequate sanitation within the existing system. Water is also scarce in the capital, Accra. In typical working class areas of Accra such as Medina, it would cost a family 3,000 cedis to use 10 buckets of water a day if prises were to follow market rate tarrifs. Yet, the minimum wage per day is 7,000 cedis.
Also in South Africa, protest is spreading. The South African Anti-Privatisation Forum, a collective of community based organisations and labour unions, has mobilised against the privatisation of local government services, including water. Various strikes over social issues have marked the last year. The recent spread of cholera in South Africa is directly linked to the poor water quality in many working class areas. More expensive water could exclude even more people from clean and safe water.
The table identifies 8 African countries and paraphrases the specific IMF loan conditions relating to water privatization or water cost recovery, as mapped by the Globalization Challenge Initiative. In most of the countries, the IMF conditions require some form of privatization, and in several countries the conditions require both privatization and greater cost recovery…