Joseph E Stiglitz, nobel prize of economy.., in his book Gobalisation and its contents wants us to believe that the requirements in economic matters to the countries debt would be inspired by American economist John Williamson has called the Washington consensus : assumption that leaving do the market, growth would return, improving the fate of all its inhabitants, and also thanks to the invisible hand of Adam Smith which would magically balance markets through the laissez-faire.
In fact, neo-liberal standard measures, without taking into consideration the peculiarity of the country, that the IMF and World Bank impose on States in crisis (they spend more than taxes and related taxes) that require loans, are directly the implementation of the neoliberal ideology of Milton Friedman, economic and political dictate destructor.
These measures constitute the economic component of the shock strategy that uses U.S. imperialism, denounced by Naomi Klein in his book : the shock doctrine (the strategy of shock) used by the US t steal the wealth of countries (public and private enterprises, raw materials), but without having previously applied to them the military aspect of this strategy of shock: attack on this country under false pretences and on behalf of a so-called return to democracy, destruction of the country and its infrastructure as in Iraq recently etc.!
The irony is that the IMF works with taxpayers money from around the world and does not reflect the citizens of troop-contributing countries, or those whom he upsets and or destroyed life! Its leaders are chosen behind closed doors and has no experience in economic and social development.
While the IMF should be limited to the regulation of the budget deficit at monetary policy to resolve liquidity problems when private banks no longer want to lend to the reduction of inflation, trade deficit, external debt, and the World Bank to the State expenditure, to financial institutions, to the return to full employment, trade policy, the aim is first to loot and destroy the country in recession.
The plundering of the country in crisis
– The privatization of the State helped !
Without concern for the environment, of democracy, of the human rights, of social justice, only the interests of the United States and their cronies, dictate the measures of ‘experts’ of the IMF and the World Bank, in order to reduce the role of the State for the benefit of the multinationals, who invaded the country in crisis and grab the public companies and restructure them, because the lack or the destruction of the country’s legal structures leave predatory countries to whatever want them.
Their businesses looted assets of public enterprises of the assisted country, bought low-cost concessions, take ownership of the natural resources of the country, delete essential services (unemployment, retirement, health, justice) that made State enterprises, or make them impractical for the greatest number, because of their high cost.
– The end of free education highlights the rise of social inequalities.
The removal of support for the price, increases falling revenues and lower salaries, as well as the rise in unemployment, causing riots and street fights, endangering social stability of the country and deteriorating conditions for investments.
When the State is on the brink Anglo-American speculators convert, thanks to free convertibility imposed, the local currency in dollars by lowering its value and repatriating dollars in their country. Then, they speculate the downward on the local currency taking advantage of collapse of the exchange rate between the $ and the currency of the country : they borrow local currency to local banks, convert the money borrowed in dollars and then after the fall of the currency of the country helped repay the local bank by taking advantage of the new rate of more favourable exchange between the dollar and the local currency.
– The deregulation of the economy of the assisted country !
One of the obsessions of the IMF is supposedly the fight against inflation: for this, it gets the lowering of the country’s borders – abolition of customs duties and its opening to the wild competition – while the USA are trying to impose freedom of trade under the guise of the IMF, to the poor countries, but continue to improperly protect their products from competition from other countries, either by closing their borders, either by heavily taxing foreign imports or subsidizing their domestic industries.
Local companies cannot bear it closing their doors, and peasants swamped by cheaper imported products, because they are subsidized, commit suicide or disappear.
Those that have not closed their doors are forced to borrow in foreign financial markets under pressure from the USA.
The removal of the regulations of the country also allows local mafias to seize the most lucrative activities.
The rapid liberalization of the market of capital and securities, instead of lowering interest rates, promotes their climb, placing higher bids borrowings.
The massive entry of capital pushed the exchange rate of the currency of the country, making exports more expensive.
The forced increase in interest rates does increase unemployment – businesses can no longer borrow to modernize their means of productions or to grow, close their doors or reduce their activity – , local banks close also, having suffered many bankruptcies of its borrowers. All of these factors slow down the economy and pushing the country into stagnation.
It encourages lenders and rolling borrowers, creates speculative bubbles that will explode at one time or another. So the IMF and WB appropriators sovereignty of the assisted countries and cause the collapse of its GDP and its bankruptcy in Russia.
Liberalisation also allows speculative capital to invade the country and flee with the money of others. It does not attract foreign capital or new investors who create plants and therefore jobs. Companies of the country can no longer invest long term with money that speculators can resume them from one day to the next.
Liberalization, coupled with privatization, facilitates capital flight and the formation of monopolies and cartels. They raise prices by restricting production.
Foreign banks financing more than the multinationals at the expense of national SMEs.
In addition, the lack of funding has a direct impact on the growth of the country, increasing budget deficits causing its collapse.
Similarly, the degradation of the economy of the assisted country contributes to sink its neighbours: each country weakens reducing its imports, imposing customs duties, through devaluations that make its products cheaper despite the pressures of the IMF, thus causing a slowdown in the global economy and doing drop raw materials and commodities.
The country is also invaded by foreign companies which destroy local competition and benefit through their monopoly position to raise prices. Profits of these companies never fall on the local population and are repatriated to the USA.
In fact, this liberalisation only serves the interests of American Bankers represented by the US Treasury and the profits of the multinationals which can implant.
Once the country has been plundered, privatized and deregulated, the IMF imposes an unprecedented austerity cure which merely worsen the situation of the country and exacerbate the crisis that crosses the country, so that it remains under his arm.
The imposition of a policy of structural adjustment
– The reduction of public expenditure
The IMF conditioned its help by the imposition of a cure for excessive austerity meant to restore the confidence of investors, called structural reforms : reduction of budgets, salaries, pensions, social spending, increased taxes, the dismantling of the employment protection which undermine and stifle a possible resumption of the growth of the country helped and even worse recession.
The IMF spends billions to try to keep rates at unsustainable levels, but has no money to help the people sacrificed (futures prices, unemployment benefits, free health care, housing assistance).
Plundered, privatized, deregulated, very weakened the assisted country is enslaves thanks its debts.
The subjugation of the country by the debt
It begins with the privatisation of the Central Bank of the assisted countries, who can no longer that borrow from banks of developed countries for usurious rates and at the same time loses its power to intervene on borrowing rates, therefore its monetary independence. If the State goes bankrupt, thank to the pledge of its debt on its heritage, private banks then make low hand on its heritage.
The IMF measures lead to the increase of the debt of the assisted countries and requests for debt relief are conditioned by the implementation of the measures recommended by the IMF which make worse it.
Finally, under pressure from the USA, ready money not used for the rehabilitation of the country, but to rescue creditors of the country. Rescue only serve to save even that bankers can in these circumstances.
Privatization money and borrowing from abroad have been largely diverted and has served to enrich the oligarchy of the country.
Privatization and the opening of markets have led to the plundering of the country’s assets and its decline.
Liberalization required, under the guise of the IMF, is one-way and the USA continue to protect its industries from global competition by subsidising or by taxing imported products
Globalization advocated by officials of the USA is a dictatorship of the jude-anglo-american finance : they ask the country to surrender their sovereignty to their speculators and their multinational companies for short-term profits and not to improve the standard of living of the attacked country.
Therefore, the IMF does not serve the interests of the global economy, but those of American finance (FED, US Treasury) in the world, including the obscure motivations are to take control of the planet.Countries and continents most affected by the damaging effects of the IMF were Latin America, Nigeria, Botswana, the Russia, Asia.
The IMF is trying, right now, to get his hands on the Tunisia.
Finally, one may wonder if Joseph E Stiglitz demonstrates a great naivety in this book, an astonishing blindness to an economist, a lack of economic culture, or is he only an accomplice, as an American Jew, predatory and criminal American imperialism ?
The only solution for a country affected by a crisis and therefore very indebted is to cancel its debt.