IMF pandemic-related loans are forcing developing nations to implement austerity measures that fuel further impoverishment and inequality, an Oxfam analysis finds.
IMF Managing Director Kristalina Georgieva during a media panel on Feb. 4 on policy options for a new social contract and a more inclusive future. (IMF/Cory Hancock)
By Brett Wilkins
Common Dreams
The conditions of nearly 90 percent of the International Monetary Fund’s pandemic-related loans are forcing developing nations suffering some of the world’s worst humanitarian crises to implement austerity measures that fuel further impoverishment and inequality, an analysis published this week by Oxfam International revealed.
Oxfam found that “13 out of the 15 IMF loan programs negotiated during the second year of the pandemic require new austerity measures such as taxes on food and fuel or spending cuts that could put vital public services at risk.”
This stands in stark contrast with IMF Managing Director Kristalina Georgieva’s admonition to the European Union last year that the wealthy bloc should not endanger its economic recovery with “the suffocating force of austerity.”
“This epitomizes the IMF’s double standard,” Oxfam International Senior Policy Advisor Nabil Abdo said in a statement. “It is warning rich countries against austerity while forcing poorer ones into it.”
At the start of the pandemic, the IMF issued billions of dollars in emergency loans to developing countries with few or no conditions. However, the institution has reverted to its highly controversial practice of requiring nations to impose the type of austerity measures that have exacerbatedpoverty and inequality, stymied countries’ efforts to meet climate goals, fueled global unrest, and even played a key role in sparking revolutions.
The Oxfam report notes that the conditions of a 2021 loan of $2.3 billion to Kenya compelled the country to freeze public-sector pay for three years, while mandating higher taxes on food and cooking gas.
“More than three million Kenyans are facing acute hunger as the driest conditions in decades spread a devastating drought across the country,” Oxfam notes. “Nearly half of all households in Kenya are having to borrow food or buy it on credit.”
Social distancing in a food market in Kenya, April 22, 2020. (World Bank / Sambrian Mbaabu)
Sudan has had to end fuel subsidies, a policy that has disproportionately affected the nearly 50 percent of the population that is impoverished.
“The country was already reeling from international aid cuts, economic turmoil, and rising prices for everyday basics such as food and medicine before the war in Ukraine started,” said Oxfam. “Over 14 million people need humanitarian assistance (almost one in every three people) and 9.8 million are food insecure in Sudan, which imports 87 percent of its wheat from Russia and Ukraine.”
Oxfam’s analysis also found:
- Nine nations including Cameroon, Senegal and Surinam must introduce or increase the collection of value-added taxes (VAT), which often apply to everyday products like food and clothing, and fall disproportionately on people living in poverty; and
- Ten countries including Kenya and Namibia are likely to freeze or cut public sector wages and jobs, which could mean lower quality of education and fewer nurses and doctors in countries already short of healthcare staff. Namibia had fewer than six doctors per 10,000 people when Covid-19 struck.
“The pandemic is not over for most of the world,” said Abdo. “Rising energy bills and food prices are hurting poor countries most. They need help boosting access to basic services and social protection, not harsh conditions that kick people when they are down.”
“The IMF must suspend austerity conditions on existing loans and increase access to emergency financing,” he added. “It should encourage countries to increase taxes on the wealthiest and corporations to replenish depleted coffers and shrink widening inequality. That would actually be good advice.”
Oxfam’s analysis comes as the IMF’s annual spring meetings get underway in Washington, D.C.
Last week, the leftist group Progressive International held an inquiry into the IMF at which lawyers, experts, and parliamentarians from nine nations recommended actions from bringing the institution under the United Nations’ Economic and Social Council to taking it to the International Court of Justice over its alleged “illegality, impunity, and disregard for human rights.”
Brett Wilkins is a staff writer for Common Dreams.
This article is from Common Dreams.
The regime in Washington and their vassals in Europe can babble on all they like about the Chinese BRI being a debt trap but the real debt trap, as proven over and over, is the US controlled IMF.
“… 9.8 million are food insecure in Sudan, which imports 87 percent of its wheat from Russia and Ukraine.”
Knowing this makes everyone backing the US smirking“strategy” of bleeding Russia dry by prolonging this war, let alone preventing it, a criminal. And yes, I’m looking at you especially, Hillary!
The underlying causes that led up to the Ukraine war and all that followed since, bears closer examination here. The big picture here cannot be reduced to issues of pandemic, food exports from Russia, or it’s neighbors. The best analysis can be found in Carroll Quigley’s book, Tragedy and Hope. Thomas Jefferson one of our founding fathers put it well, banking institutions are more a threat to our republic than standing armies..Off topic: Well, we kept the standing army anyway and now they’re in our back yards and town squares but I digress..
Back in 1966, Quigley revealed a long term conspiracy by western Occident bankers and the USA to subjugate second and third world governments through a predatory loan system. This under the guise of nation building, releasing funds or restricting them, based on how malleable aka corrupt, the leadership was. In effect to centralize as many as possible second and third world development projects with one Oberführer ( a secret group of banking and transnational board members) that would assume to assume all the former authority of sovereign leadership and policy making. Vulnerable third world countries were the first target of what would become that coined word, “globalists”. Countries who’s only collateral for loans issued from foreign banks were forced to submit to the extraction, processing and export of raw materials such as coal, gas, oil, iron, rare earths, lithium and so on. This new way of “doing business” i.e., color revolution, assassination, bribery, murder, extortion, blackmail, skirted governmental over-site and internal legal challenges by employing black ops. The initial “loan” was then gradually repaid as soon as extraction began with of course, an incremental rise assigned to the principle and interest aka permanent indebtedness. This rise of a Corporatist global commerce network funneled huge profits into private hands, an ever richer oligarchy growing and maximized by two world wars. . One might say, a consolidation of power, wealth and control into fewer and fewer hands. A more recent publication supports Quigley’s general analysis of globalization, readers may wish to review author, John Perkins in his first book, Confessions of An Economic Hit Man (2004)
ASIDE: Recall that India used this phrase over and over again during the first cold war? well has a ring to it eh? More recently it is also colloquially referred to as “Finlandization”
Let’s begin at the beginning, by popular consensus the duly elected 4th president of Ukraine, Viktor Yanukovych got on his soapbox announcing that the Ukraine will assume a “non-aligned” stance. ASIDE: Recall that India used this phrase over and over again during the first cold war? well has a ring to it eh? More recently it is also colloquially referred to as “Finlandization” This statement was quickly translated by the globalist/neocons to mean that Ukraine will be setting up alliances with eastern or far eastern nations, not necessarily the western Occident businesses. So, in with the heavy mob, field operatives were summoned, the CIA-MI-6 dusted off the old Galdio files, rushed in to throw ‘Old Viktor out of office and replace him with again, a malleable and corrupt man who had a career in performances on-stage as a professional comedian! Somehowthis Zelensky character became Ukraine’s highest official and billionaire over-nite! just from cracking a few jokes and playing the piano with great skill however using bizarre substitutes for the human finger…all too strange right?
Now to my point(s)..Will the Shanghai Cooperation Organization (SOC) Commonwealth of Independent States (CIS) Community for Democracy and Rights of Nations, which currently include, Abkhazia, Artsakh, South Ossetia, Transnistria all turn towards China’s AIIB for the financing of domestic projects? Is the AIIB (China) in a position to confront the IMF and World Bank with an alternative development resource? If so, this is the real stuff of MAJOR CONFLICT- Western banks v.s. the East. In the simplest terms, the USD reserve system of exchange (fiat dollars) in competition with soon to be announced, regional currencies bundled together by Russia, China, India, and perhaps Iran as a basket of gold backed currencies and altogether new financial system ? In China today, anyone can walk into a bank and exchange yuan for gold coin or Visa Versa. In any case, did we somehow forget the real reason Qaddafi was murdered? His plan to release a gold dinar, an independent hard currency throughout Africa, freeing his citizenry from USD bondage, the IMF and the French African franc. Qaddafi’s gold stores would guaranty and finally remove centuries long colonial exploitation. Question for immediate resolution: Are the neocons crazy enough to believe that a China-Russian financial and perhaps military alliance can be dealt with along similar lines as with Afghanistan, Iraq, Libya? with color revolution (overthrow), yellow journalism, blackmail, assassination, major WAR?!
Forced sterilization, forced buying of US food and privatisation programs (sold and contracted westen companies) also comes to mind with IMF and World Bank. Crooks.
IMF – I call it Instant Misery Follows. Read the book ‘Confessions of an Economic Hit Man’ and get a much clearer picture at what the US is really all about: EXTORTION.
Glazyev has said that countries that join the monetary system Russia and China are putting together, can simply default on their euro/dollar loans. They don’t care. Countries can start fresh. Hopefully by doing something wiser than they have in the past.
“IMF Loans Forcing Austerity on Crisis-Ravaged Nations”
Yes that has been their purpose since inception.
“Debt” has always been a tool to sustain “The United States of America” – sovereign debt the debt of preferance to facilitate sustainability.
Call it what it really is: EXTORTION
I have no faith also that bringing the IMF under UN control would do anything. The oligarchs who control those bodies include psychopathic, greedy oligarchs who just want to pad their already humongous wealth; it is a sham show.
Since the US effectively owns both the IMF and the UN, it seems unlikely much can be done to rein in austerity measures that the IMF imposes on weaker States and countries.
It seems to be the official policy of the US to prey on the weak, whether domestically or internationally.
I would say that it has been the policy since the nation’s inception…
See my comment above.