Forget the fake Western claims about China’s Belt & Road Initiative: the US controlled World Bank and International Monetary Fund have been bankrupting and enslaving developing nations with crippling debt, “austerity” and financial colonialism for 70 years.
While supposedly an “international organisation”, all appointments to the Board of the World Bank World must be approved by the US Congress, and the Bank has been, since its creation, headquartered in Washington DC, in the USA.
The following is shared on 12 Feb 2022 from Mark Turner of The Amazing One Belt One Road (OBOR-BRI) & A Real World Order group on Facebook: – https://www.facebook.com/groups/1678206505755450/about
The IMF, WORLD BANK, debt traps and economic, financial colonialism – how the US entraps the world
“The world bank was set up by the United States in 1944, along with its sister institution, the International Monetary Fund (IMF). Their purpose was to create an international order like a funnel to make other countries economically dependent on the United States. To make sure that no other country or group of countries – even all the rest of the world – could not dictate U.S. policy. American diplomats insisted on the ability to veto any action by the World Bank or IMF. The aim of this veto power was to make sure that any policy was, in Donald Trump’s words, to put America first. “We’ve got to win and they’ve got to lose.” https://www.nakedcapitalism.com/…/michael-hudson…
The World Bank was set effectively up from the outset as a branch of the US military, of the Defense Department.
John J. McCloy (Assistant US Secretary of War, 1941-45), was the first full-time president. He later became Chairman of Chase Manhattan Bank (1953-60). McNamara was US Secretary of Defense (1961-68), Paul Wolfowitz was US Deputy and Under Secretary of Defense (1989-2005), and Robert Zoellick was Deputy US Secretary of State.
So I think you can look at the World Bank as the “soft shoe” of American diplomacy.
What is the difference between the World Bank and the International Monetary Fund (IMF)? Is there a difference?
Yes, there is. The World Bank was supposed to make loans for what they call international development. “Development” was their euphemism for dependency on U.S. exports and finance. This dependency entailed agricultural backwardness – opposing land reform, family farming to produce domestic food crops, and also monetary backwardness in basing their monetary system on the dollar. The World Bank was supposed to provide infrastructure loans that other countries would go into debt to pay American engineering firms, to build up their export sectors and their plantation sectors by public investment roads and port development for imports and exports.
Essentially, the Bank financed long- investments in the foreign trade sector, in a way that was a natural continuation of European colonialism, [but tying developing economies into the US financial system and US debt – CEN comment].
The IMF was in charge of short-term foreign currency loans. Its aim was to prevent countries from imposing capital controls to protect their balance of payments. Many countries had a dual exchange rate: one for trade in goods and services, the other rate for capital movements. The function of the IMF and World Bank was essentially to make other countries borrow in dollars, not in their own currencies, and to make sure that if they could not pay their dollar-denominated debts, they had to impose austerity on the domestic economy – while subsidizing their import and export sectors and protecting foreign investors, creditors and client oligarchies from loss.
The IMF developed a junk-economics model pretending that any country can pay any amount of debt to the creditors if it just impoverishes its labor enough. So when countries were unable to pay their debt service, the IMF tells them to raise their interest rates to bring on a depression – austerity – and break up the labor unions.
That is IMF euphemism for“rationalizing labor markets.” The rationalizing is essentially to disable labor unions and the State controlled public sector. The aim – and effect – is to prevent countries from following the line of development that had made the United States rich – by public subsidy and protection of domestic agriculture, public subsidy and protection of industry and an active government sector promoting a New Deal democracy.
The IMF was essentially promoting and forcing other countries to balance their trade deficits by letting American and other investors buy control of the commanding heights of the local economy, mainly infrastructure monopolies, and to subsidize their capital flight [out of the country].
The IMF and the World Bank backed the cosmopolitan classes, the local wealthy [“comprador class”]. Instead of letting countries control capital outflows and prevent capital flight, the IMF’s job is to protect the richest “One Percent” and foreign investors from balance-of-payments problems.
[Through such mechanisms] the World Bank and American diplomacy have steered [developing and secondary] nationsinto a chronic currency crisis. The IMF enables its wealthy constituency to move their money out of the country without taking a foreign-exchange loss. It makes loans to support capital flight out of domestic currencies into the dollar or other hard currencies. The IMF calls this a “stabilization” program.
It is never effective in helping the debtor economy pay foreign debts out of growth. Instead, the IMF uses currency depreciation and sell-offs of public infrastructure and other assets to foreign investors after the flight capital has left and currency collapses. Wall Street speculators have sold the local currency short to make a killing, George-Soros style.
“These mechanisms have been the core means by which US imperialism has subjugated developing nations, and maintained its “market” dominance internationally. This is an essential part of the US much beloved “international rules-based order”. When this does not work, the US regime resorts to coups, “colour revolution”, “sanctions” and if need be outright military invasion and occupation. This not only reserved for developing nations – since World War 2 the US has maintained hundreds of military bases in so-called “allied countries” particularly in the European Union, the United Kingdom, Japan and Korea effectively remain under US military control.”China Environment
China-Environment-News.com on Facebook, 13 Feb 2022.
The Amazing One Belt One Road (OBOR-BRI) & A Real World Order, 12 Feb 2022.