The International Monetary Fund (IMF) brigands spent some weeks in Namibia, and after a sumptuous welcome they lambasted the government, ordering it to consider conservative economic policies to address the country’s fast-escalating house prices that have become “an emerging risk”.
This problem of inflation in house prices is so pervasive that it has become a national curse that may require another government-sponsored national prayer day.
The financial gangsters of the IMF praised government’s initiatives to address unemployment on various fronts and called for their “effective and swift implementation”. Unfortunately, these initiatives remain secret, unknown to the unemployed and poverty stricken people. Can someone from either the government or the IMF please tell the nation what these initiatives are? Does the IMF prescribe them, or are they home grown?
One thing is for sure: when the IMF becomes jittery we must be very scared. This is because its history and “achievements” in addressing unemployment and socio-economic policies is truly frightening.
Lest we forget, this year marks the 71st anniversary of the IMF and the World Bank. The World Bank, initially known as the International Bank for Reconstruction and Development, was formed to fund the rebuilding of infrastructure in nations ravaged by World War II.
Its focus shifted away from Europe in the mid 1980’s to funding massive industrial development projects in Africa, Asia and Latin America in return to milking these countries of their natural resources. Through their propaganda machinery, including dangling a carrot-on-stick in the faces of Third World leaders, both institutions have managed to highlight their “assistance” to Africa.
In reality, their policies, initiatives and so-called assistance, have become key planks in the architectural framework of policies known in international relations as ‘The Washington Consensus’, and are responsible for the growth of inequality and the explosion of poverty in the world, particularly in Africa.
The two banks have become powerful international relations tools of the USA and Europe to enforce their policies by economically subjugating and forcing Third World countries to pander to the bankers’ whims and dictates.
A few examples may suffice to demonstrate this fact. In the late 1970s and early 1980s the two institutions intervened on the continent under the pretext of “helping to accelerate development” through “solving the debt crisis”. They proposed stabilisation and structural adjustment programmes (SAPs) as a remedy.
It is now ancient history that these attempts achieved exactly the opposite and contributed to worsening external debt and exacerbating the overall economic and social crises. At the onset of their interventions, the ratios of debt to gross domestic product (GDP) and exports of goods and services were respectively 23.4% and 65.2%. Ten years later, in 1990, they had deteriorated to respectively 63% and 210%.
The deterioration in debt ratios is reflected in the inability of many African countries to service the external debt. As a result, accumulated arrears on principal amount and interest have become a growing share of outstanding debt.
The IMF and World Bank impose stiff conditions on African countries in exchange for loans and credits. They are the major sources of lending to Africa and use the loans they provide as leverage to prescribe policies and dictate major changes in the economic and social policies.
They follow a protocol called the “one-dollar-one-vote” system, whereby members with the greatest financial contributions have the greatest say in decision-making. The USA holds close to 18% of the vote in the World Bank, the Group of 7 (G-7) holds 47% of the votes, while 48 sub-Saharan African countries hold only 9% of the votes.
This system ensures that the IMF and World Bank act in the interests of the rich countries and force the poorest countries to increasingly turn to these lenders for financial assistance, because their overall impoverishment has made it impossible to borrow elsewhere.
In a nutshell, the IMF and World Bank have great control over borrower governments. On average, low-income countries are subject to as many as 67 conditions per World Bank loan. Yet, the abundant resources of Africa continue to feed western corporations, while Africans languish in abject poverty.
The lesson is simple: if you let a kleptomaniac fraudster into your bedroom, don’t come complaining about your stolen jewellery. Once you get the IMF/World Bank money to bail out a failed economy or develop your country, expect to hand over the ‘keys’ to your country’s resources. It becomes an impossible task to get out of this vicious debt cycle.
Namibia and Africa do not need the IMF and the World Bank to lecture us on how to address our serious social and economic challenges. Their programmes and initiatives have never been helpful. There is no evidence of their success anywhere.
_What we urgently need is good governance, focused leadership to protect and harness our natural resources for the benefit of Namibians. Failing this test will drive us deeper into the clutches of the IMF and World Bank.
*Dr Charles Mubita holds a PhD in International Relations from the University of Southern California.