Tag Archives: imf

Structural Adjustment Programs, Not Drought, Causing Famine

West Africa’s “slow-motion” famine

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World Bank Famine in Niger

In 2005 a food crisis hit Niger. Out of a population of 12 million, 3.6 million went hungry and 800,000 children faced starvation. But activists in Niger claim that the famine was not caused by drought. “This is a structural famine. A permanent famine,” says journalist Moussa Tchangari. “It was caused by 20 years of structural adjustment programs.”

According to the USAID-funded Famine Early Warning System (FEWS), agricultural production was only 11% below the 5-year average and was actually higher than levels in 2001-02, when there was no food crisis. The real problem, according to FEWS, was that food prices rose between 75-80%.

Moussa Tchangari claims that, “The root of the problem is that for more than 20 years, neoliberal policies have been forced on this country. . . the international financial institutions encouraged export agriculture, so that now we do not produce enough food to feed the population.”

Like many African countries, Niger was pressured by the IMF, World Bank, and EU development agencies to dismantle government services and to move from subsistance agriculture to export agriculture – to grow cash crops instead of food.

In the middle of the famine, Niger continued to export food. Millions starved and tens of thousands of chlidren died while the markets remained full of food they could not afford to buy.

In the first months of the crisis, the government of Niger and the UNs World Food Program refused to distribute free food to the population because interfering with the free market could disrupt Niger’s development out of poverty.

Tchangari believes that Niger’s problems have been caused by this model of development and that the country needs a different aproach. “The solution is to put in place an agricultural policy that can insure food self-sufficiency. It is possible. . . It is a question of political will.”

World Wants to Divorce Itself From U.S. Dollar

“US is on the slippery slope to economic collapse”

The Demise of the Dollar

UN dollar to replace US dollar?

UN Says New Currency Is Needed to Fix Broken ‘Confidence Game’

The dollar’s role in international trade should be reduced by establishing a new currency to protect emerging markets from the “confidence game” of financial speculation, the United Nations said.

UN countries should agree on the creation of a global reserve bank to issue the currency and to monitor the national exchange rates of its members, the Geneva-based UN Conference on Trade and Development said today in a report.

China, India, Brazil and Russia this year called for a replacement to the dollar as the main reserve currency after the financial crisis sparked by the collapse of the U.S. mortgage market led to the worst global recession since World War II. China, the world’s largest holder of dollar reserves, said a supranational currency such as the International Monetary Fund’s special drawing rights, or SDRs, may add stability.

“There’s a much better chance of achieving a stable pattern of exchange rates in a multilaterally-agreed framework for exchange-rate management,” Heiner Flassbeck, co-author of the report and a UNCTAD director, said in an interview from Geneva. “An initiative equivalent to Bretton Woods or the European Monetary System is needed.”

The 1944 Bretton Woods agreement created the modern global economic system and institutions including the IMF and World Bank.

Enhanced SDRs

While it would be desirable to strengthen SDRs, a unit of account based on a basket of currencies, it wouldn’t be enough to aid emerging markets most in need of liquidity, said Flassbeck, a former German deputy finance minister who worked in 1997-1998 with then U.S. Deputy Treasury Secretary Lawrence Summers to contain the Asian financial crisis.

Emerging-market countries are underrepresented at the IMF, hindering the effectiveness of enhanced SDR allocations, the UN said. An organization should be created to manage real exchange rates between countries measured by purchasing power and adjusted to inflation differentials and development levels, it said.

“The most important lesson of the global crisis is that financial markets don’t get prices right,” Flassbeck said. “Governments are being tempted by the resulting confidence game catering to financial-market participants who have shown they’re inept at assessing risk.”

The 45-year-old UN group, run by former World Trade Organization chief Supachai Panitchpakdi, “promotes integration of developing countries in the world economy,” according to its Web site. Emerging-market nations should consider restricting capital mobility until a new system is in place, the group said.

The world body began issuing warnings in 2006 about financial imbalances leading to a global recession.

The Dollar Collapses

Appeasing the Liberals to Win IMF War Funding

House Approves $106B Bill to Fund Wars in Iraq, Afghanistan

The House today passed a $106 billion bill funding the wars in Iraq and Afghanistan through September, as House Democrats backed President Obama despite misgivings among the ranks about his strategy in Afghanistan.

The 226 to 202 vote came after Obama and Treasury Secretary Timothy F. Geithner had called some reluctant Democrats during the day imploring them to back the bill, and Speaker Nancy Pelosi (D-Calif.) had strongly pressed her colleagues in a closed-door meeting to vote for the bill in a show of support for Obama, even if they oppose his strategy for increasing troops in Afghanistan. In the end, 221 Democrats voted for the bill, while 32 opposed it.

All but five Republicans opposed the bill after the White House inserted money to fund a line of credit for the International Monetary Fund, which the GOP said amounted to a “global bailout.”

“We are in the process of wrapping up the wars. The president needed our support,” said Rep. Anthony Weiner (D-N.Y.), who had earlier said he opposed the war funding but voted for it in the end. “But the substance still sucks.”

…House Democrats had put off the vote for more than a week, looking to win support for the bill. President Obama, who had pushed to insert a provision in the bill to bar the release of photos depicting abuse of detainees held in U.S. custody abroad, demanded the Senate take out the provision to win votes from House liberals who said they would not support the war bill if the photo ban was included.

In the end, 19 House Democrats backed the bill who had opposed it the first time, although some cited loyalty, not agreement with Obama’s plans, as their reason. Full Story

Campaign to stop IMF and war funding

Related: Obama Pleads for $100 Billion Loan to IMF to Fund Wars

Over One Billion Starving People – Who Are the Culprits?

U.N. warns of catastrophe as hungry people top one billion

hunger

High food prices have pushed another 105 million people into hunger in the first half of 2009, the head of the U.N. World Food Programme said on Friday, raising the total number of hungry people to over 1 billion.

Urging rich nations at a meeting of G8 development ministers not to cut back on aid, Josette Sheeran said the world faced a human catastrophe as more people struggle to eat a decent meal.

“This year we are clocking in on average four million new hungry people a week, urgently hungry,” Sheeran told Reuters.

“For the first six months of this year, 105 million people have been added,” she said, citing figures to be released by the U.N. Food and Agriculture Organization next week that will raise the total number of undernourished people to over 1 billion.

In 2008, FAO said the world’s hungry numbered 963 million.

The WFP needs $6.4 billion this year for food aid, but donors’ contributions have fallen way behind that level — it had around $1.5 billion at the end of last week.

The agency says it has had to cut food aid rations and shut some operations in eastern Africa and North Korea because of the credit crunch.

“I know it seems a big figure, but if you compare it with the global stimulus package, it means that for less than 1 percent of that we could help meet the urgent human crisis that is unfolding, and that is just as essential to the stability of the world,” Sheeran said.

She said despite a decline in most food prices from record peaks last year, they remained high in developing countries, while global food aid was at a 20-year low.

The financial crisis has made things worse, and in terms of staple food, people in poorer countries today can only afford about a third of what they could afford three years ago. Full Story

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HungerSite.com

HungerSite.com

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Experts: Obama biofuel policy boosts world hunger

The Obama administration’s policy of producing ethanol as a renewable fuel substitute for gasoline will add to the number of people in Third World countries who are chronically hungry, according to energy experts.

The administration’s mandates for the use of ethanol are “immoral,” asserts Robert Bryce, managing editor of the monthly industry magazine Energy Tribune.

“We are burning food to make motor fuel at a time when there’s a growing global shortage of food and no shortage of motor fuel,” Bryce told WND.

“The corn ethanol scam is not an energy program,” he continued. “It is a massive farm subsidy program masquerading as an energy program.”

The U.S. Department of Energy did not respond to a WND request for comment on this story.

A controversial report released earlier this month by the Congressional Budget Office, or CBO, said the increasing demand for corn to produce ethanol contributed between 10 to 15 percent of the overall 5.1 percent increase in the price of food from April 2007 to April 2008, as measured by the Consumer Price Index. Full Story

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How the World Bank, IMF and WTO destroyed African agriculture

Biofuel production is certainly one of the culprits in the current global food crisis. But while the diversion of corn from food to biofuel feedstock has been a factor in food prices shooting up, the more primordial problem has been the conversion of economies that are largely food-self-sufficient into chronic food importers. Here the World Bank, International Monetary Fund (IMF), and the World Trade Organization (WTO) figure as much more important villains.

Whether in Latin America, Asia, or Africa, the story has been the same: the destabilization of peasant producers by a one-two punch of IMF-World Bank structural adjustment programs that gutted government investment in the countryside followed by the massive influx of subsidized U.S. and European Union agricultural imports after the WTO’s Agreement on Agriculture pried open markets. .

African agriculture is a case study of how doctrinaire economics serving corporate interests can destroy a whole continent’s productive base. Full Story

Obama Pleads for $100 Billion Loan to IMF to Fund Wars

Democrats agree to IMF money in U.S. war bill

Democrats in the U.S. Congress have reached a deal to boost support to the International Monetary Fund, lawmakers’ aides said on Tuesday, a victory for President Barack Obama who pledged to help the lender assist countries in the global economic crisis.

The war funding measure will provide a $100 billion credit line to the IMF, increase the U.S. member contribution to the IMF by $8 billion and authorize the United States to back the IMF’s plan to sell 400 tons (12.97 million ounces) of gold, said the aides, who declined further identification.

Obama had pleaded with the House of Representatives and the Senate to approve the provisions and the full funding package is expected to be completed in the coming days.

The bill must be voted on in both chambers before being sent to Obama. The House approved a $96.7 billion measure for the wars in Iraq and Afghanistan without including the IMF provisions while the Senate approved a $91.3 billion version with them.

The final package is also expected to include funding for eight Boeing Co C-17 military transport planes that the House approved but the Senate cast aside, one source said.

Senate Appropriations Committee Chairman Daniel Inouye said that “so far” 11 Lockheed Martin C-130 transport planes approved by the House also were in the compromise package.

Other unresolved disputes include how much additional economic aid to provide Pakistan.

The House ignored Obama’s IMF request when it passed its version and Appropriations Committee Chairman David Obey, a senior Democrat, expressed reservations about including it until European countries did more to stimulate their economies.

Obama’s credibility has been on the line with world leaders because he pledged the support at a Group of 20 nations meeting in April. The G20 agreed to provide the IMF $500 billion more to help developing countries coping with the economic downturn.

“Even if the $500 billion isn’t completely used, it is part of the overall strategy from this administration about building confidence around the world,” said Nancy Birdsall, president of the Washington-based Center for Global Development.

Additionally, congressional authorization is needed for the U.S. representative to the IMF to vote on the gold sale.

Democrats could have some problems getting the final bill through the House because about 50 anti-war Democrats voted against it initially because they opposed the wars while senior House Republicans have expressed unease about including the IMF provisions in an emergency war funding bill.

“We should not be having this discussion. IMF funding has no business being included in the war supplemental” bill, said Representative Eric Cantor, a member of the Republican leadership.

It would take a defection of almost all Republicans and the anti-war Democrats for the bill to fail but because the measure funds U.S. troops in the field, it is unclear whether they are willing to vote down the measure.

To learn more about the IMF see: Funding the IMF for the ‘New World Order’

IMF’s Big, Bold Role in a Worsening Economic Crisis

Economic crisis getting worse: IMF

A Bigger, Bolder Role Is Imagined For the IMF

Inside a cavernous assembly hall in downtown Washington, dignitaries gather twice a year for routine meetings of the International Monetary Fund. Before long, though, the room could take center stage in the IMF’s transformation into a veritable United Nations for the global economy.

Surrounded by blond wood paneling and a digital screen the size of a cinema’s, central bankers and finance ministers would meet to convene a financial security council of sorts. Serving almost as ambassadors to the IMF, they would debate ways to put out the world’s economic fires and stifle reckless policies before they ignite new ones.

Bowing to a new economic world order, the IMF would grant fresh powers to the likes of China, India and Brazil. It would have vastly expanded authority to act as a global banker to governments rich and poor. And with more flexibility to effectively print its own money, it would have the ability to inject liquidity into global markets in a way once limited to major central banks, including the U.S. Federal Reserve.

That image of a radically transformed IMF — whose role in the global economy had turned largely advisory in recent years — is now coming together through internal IMF documents, interviews and think-tank reports. Finance ministers from major nations will begin grappling with the formidable details of the IMF’s makeover this weekend when they converge in Washington for the fund’s biannual assembly.

The changes, broadly outlined by President Obama and other leaders of the Group of 20 nations in London earlier this month, could take months, even years to take shape. But the IMF is all but certain to take a central role in managing the world economy. As a result, Washington is poised to become the power center for global financial policy, much as the United Nations has long made New York the world center for diplomacy.

The IMF’s mission is expanding so broadly that its managing director, Dominique Strauss-Kahn, said in an interview that the organization — which underwent deep cuts last year before the financial crisis swept the globe — may boost staffing in coming months, potentially creating dozens of high-paying jobs in the District.

“The IMF is changing, and with it, there will be a sea change in the way the world economy is run,” said C. Fred Bergsten, director of the Peterson Institute for International Economics. “Their role will dramatically shift. You’re talking about monitoring fiscal stimulus, moving toward tighter regulations for financial institutions. You’re talking about global economic management in a way we have never seen.”

Already, the economic crisis is triggering a profound cultural shift, with the IMF moving away from its long-held mission to spread the gospel of capitalism around the globe.

Founded at the end of World War II to maintain stability in global currency markets, it later became known as the lender of last resort for nations in crisis, particularly as financial fires raced across Asia and Latin America in the 1990s. Its bailouts, however, were the bane of many poor countries; they often came with demands for fiscal austerity and free-market reform as the cures for developing nations — even if that meant nations had to cut back on programs for health care and schools. Full Story

Top Ten Reasons to Oppose the IMF

What is the IMF?

The International Monetary Fund and the World Bank were created in 1944 at a conference in Bretton Woods, New Hampshire, and are now based in Washington, DC. The IMF was originally designed to promote international economic cooperation and provide its member countries with short term loans so they could trade with other countries (achieve balance of payments). Since the debt crisis of the 1980’s, the IMF has assumed the role of bailing out countries during financial crises (caused in large part by currency speculation in the global casino economy) with emergency loan packages tied to certain conditions, often referred to as structural adjustment policies (SAPs). The IMF now acts like a global loan shark, exerting enormous leverage over the economies of more than 60 countries. These countries have to follow the IMF’s policies to get loans, international assistance, and even debt relief. Thus, the IMF decides how much debtor countries can spend on education, health care, and environmental protection. The IMF is one of the most powerful institutions on Earth — yet few know how it works.

1. The IMF has created an immoral system of modern day colonialism that SAPs the poor
2. The IMF serves wealthy countries and Wall Street
3. The IMF is imposing a fundamentally flawed development mode
4. The IMF is a secretive institution with no accountability
5. IMF policies promote corporate welfare
6. The IMF hurts workers
7. The IMF’s policies hurt women the most
8. IMF Policies hurt the environment
9. The IMF bails out rich bankers, creating a moral hazard and greater instability in the global economy
10. IMF bailouts deepen, rather then solve, economic crisis

Read the explanations for the Top Ten Reasons