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Friday, December 1, 2023

The World Bank and IMF: Tools of the US and the Rest of the West

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By Ali Jaw

With all the World Bank and the International Monetary Fund’s (IMF) interventions in this country and the rest of Africa for over six decades, what change have we seen? Where is the development that we can attribute to these interventions and development initiatives?

The immensity of the gap between the “haves and have-nots” is now unprecedented in our history as a people. The deprived common people are succumbing more and more to the shackles of poverty and penury, the health system is becoming more fragile than ever (Gambians really know what I mean), the standards of living are shrinking, and lives are degrading every single day.

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There are too many problems, some even unprecedented and new to us as a country and as a region. High unemployment, hunger, food insecurity, and others. There is, in fact, no doubt that the growing number of insurgencies in Africa, especially sub-Saharan Africa and the Sahel, is a result of poverty and deprivation. These armed youths are simply disappointed with the system and their runners and are generally hopeless.

So with all these on the table, wouldn’t a rational person ask whether the mechanisms adopted by these global financial institutions, which are giving loans and grants (tied with conditions), are in any way advantageous? Unfortunately, our leaders and so-called financial experts seem to have never asked themselves such a question.

The truth is that the World Bank and the IMF are nothing but Western tools aimed at gaining economic advantage over others, especially the third world. All their loans are premeditated and calculated in a way that would be beneficial to the West and, at the same time, disadvantageous to us, the people of the Third World.

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The saying goes, “A slave cannot serve two masters.” Thus, these financial institutions had only one to serve among the two: the deprived people or part of the world (the Third World) or the powers that be (advanced countries and their giant corporations). And they have chosen the masters they wish to serve.

The fact that stringent conditions and unfathomable terms, beautifully called in general ‘Structural Adjustment Programs (SAPs)’ are tied to such loans and grants has a lot to tell if scrutinised closely.

Some of the terms they present to our governments are privatisation of state or public enterprises, elimination of tariffs and import duties, currency devaluation, cutting of public spending, removing subsidise to the agricultural sector, and elimination of subsidies for fuel, food, medical care, and education, amongst other basic items and needs.

Other conditions include opening up our economies (to exploitative Western multinational corporations and business giants) and increased exports of primary goods to wealthy nations, which, according to Asad Ismi (author of Impoverishing a Continent: The World Bank and the IMF in Africa), only multiplies the “profits of Western multinational corporations while subjecting the Third World countries to horrendous levels of poverty, unemployment, malnutrition, illiteracy, and economic decline”.

How do any of these help us, Gambians and Africans? How is the removal of subsidies meant to support the underprivileged, or does privatisation and the like help the poor?

Privatisation simply means selling a public enterprise to a private enterprise or company. This is the worst move a government can make for its people, yet today we see brainwashed journalists and so-called economic and administration experts advocating for privatisation. We see newspaper editorials encouraging privatisation. Pick a random Gambian university student studying economics or public administration and ask for one thing that could solve our economic problems and boost our economy as a nation, and he would tell you, without a doubt, privatisation.

There is no doubt that a public company or business’s principal aim is not to earn profit but to render quality goods and effective services to the common masses at an affordable price. Sometimes it earns a profit, but only minimally.

However, the main or principal purpose of any private enterprise is to “maximise” profit by all means at its disposal. So when a public enterprise is rendered to a private enterprise, the prices of the goods or services that were being rendered could definitely skyrocket over time, which would undermine the purchasing power of the people and further increase the already-existing gap between the rich and the poor.

Among other implications, it could also lead to the compromising of the quality of goods and services, the mass layoff of workers (which leads to an increase in unemployment), the lowering of wages in the defunct public enterprise, fewer benefits, and insecure jobs. This is simply because these private enterprises want to spend less on production, employ fewer workers, give small salaries and maybe no benefits, and get more profits.

Private enterprises don’t care about purchasing power or affordability. They have a private aim, which is to gain more and more profit by all means.

It is clear, although we continue to be blind, that this is not intended to uplift Gambians and Africans but to give the West access to and control over every sector of our economy through their multinational business giants and corporations.

Lifting of subsidies for fuel leads to inflation of transport fairs, which would bring about more transportation problems, which would cripple local business activities, and a lack of electricity; lifting of subsidies for food means more hunger and malnutrition; lifting of subsidies for medical care leads to unaffordable healthcare and more diseases; and lifting of subsidies for education leads to illiteracy and ignorance.

Moreover, the scrapping of licenses and import tariffs leads to nothing but a massive loss of revenue for the government—millions of dollars that should have gone to the coffers for development, elevation, and uplifting of the people. It is meant to safeguard the interests of multinational corporations.

Was there any benefit when, during the COVID-19 pandemic, the Adama Barrow administration lifted the import tariffs for basic items, such as rice and oil, which led to the loss of millions? There was no benefit. The prices of such goods soared to massive levels, and inflation subdued the poor to their knees, making it more difficult than ever to survive.

Also, it is often a condition that to get some of these loans, the government must ensure more exportation of raw materials, semi-finished materials, and primary goods to wealthy nations. Then what happens? These same products would be processed and sent back to Africa at a much higher price. If these financial institutions are indeed working for the interests of Africa, like they are doing for the rich regions, then they would surely not have encouraged such detrimental practices.

What Africa needs is local processing. Raw materials and semi-raw materials should go nowhere. We need to process them here. Anyone who is not telling us this is simply an enemy, perhaps something worse.

We go on and on to discuss the negative impacts of these “structural adjustments” tied to loans from the World Bank and the IMF. The fact of the matter is that these international institutions are tools of the United States, Europe, and their corporations, who would never stop trying by all means to subdue Africa to its knees for their own imbalanced benefits.

It is all quite clear. The fact that the United States and Europe have more voice and veto powers over others in these financial institutions makes things clear. These debts are meant to shrink us as a nation and as a continent. They are meant to enslave us as a people.

All that cannot be said in an article of about a thousand words Consult the Confessions of an Economic Hitman (revised version: ‘New Confessions of an Economic Hit Man’), where US author and activist John Perkins, a former economic hitman, makes damning revelations about how the rich nations under the leadership of the US “enslave” so-called developing nations through loans (debt) with the assistance of these financial institutions.

Mr Perkins states in the introduction, “I’m haunted every day by what I did as an economic hitman.”I’m haunted by the lies I told back then about the World Bank. I’m haunted by the ways in which that bank, its sister organizations, and I empowered US corporations to spread their cancerous tentacles across the planet. I’m haunted by the payoffs to the leaders of poor countries, the blackmail, and the threats that if they resisted, if they refused to accept loans that would enslave their countries in debt, the CIA’s jackals would overthrow or assassinate them.”

He also made another disturbing revelation: “Over the past three decades, sixty of the world’s poorest countries have paid $550 billion in principal and interest on loans of $540 billion, yet they still owe a whopping $523 billion on those same loans. The cost of servicing that debt is more than these countries spend on health or education and is twenty times the amount they receive annually in foreign aid. In addition, World Bank projects have brought untold suffering to some of the planet’s poorest people. In the past ten years alone, such projects have forced an estimated 3.4 million people out of their homes; the governments in these countries have beaten, tortured, and killed opponents of World Bank projects.”

The World Bank and the International Monetary Fund are not what they seem to be in our eyes. They are not here to help but to rip Africa and bring it to its knees.

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