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September, 2000

Smash the IMF and World Bank!

 

This pamphlet, produced by the Committee for a Workers' International (CWI), is an edited and updated version of a pamphlet published by Socialist Alternative, the CWI's organisation in the US. The pamphlet was originally written by Philip Locker and published under the name of 'Global capitalism and the Socialist Alternative' and distributed at the huge demonstration against the WTO in Seattle, December 1999.

CWI online

A socialist alternative to global capitalism

cwiFollowing on the heels of Seattle, Washington, London and Melbourne tens of thousands of activists will take to the streets of Prague 23-26 September and march against global capitalism. The target: the annual meeting of the International Monetary Fund. The goal: to shut down and otherwise disrupt the International Monetary Fund (IMF) and World Bank. 

The last millennium ended with 50,000 people marching in what became the Battle in Seattle. The new anti-capitalist demonstrations have proved that Seattle was not a simple speed bump on the road to globalisation: it represented a turning point. A new wave of radicalisation is beginning to spread. Deep anger and a willingness to take a stand against injustice, fuelled by universal attacks against workers' rights, growing inequality and cut backs in social services and welfare, has been brewing. A new movement against big business and capitalism is taking shape. For example, as we go to press, widespread protests are taking place across Europe against rising petrol prices. Protestors in France have forced the Jospin government into making concessions. The blockades of fuel distribution centres, refineries and depots in Britain involved lorry owners, self-employed lorry drivers, taxi drivers, farmers and indeed workers who cannot afford the huge fuel price hikes. Despite petrol stations running dry, the blockades enjoyed huge support in society. People are fed up with the high cost of living in "rip-off" Britain. Most of the blockades have been called off, but New Labour will be forced to make fuel tax cuts, or face the possibility of further countrywide protest

These movements, which are of profound significance, foreshadow future mass struggles by the organised working class throughout Europe. It is clear that thousands of people are looking to fight back and beginning to organise. The movements against the World Trade Organisation (WTO), IMF and World Bank have a clear anti-establishment and even anti-capitalist character. The questions posed are: What is the best strategy to challenge the power of the big monopolies and the madness of the capitalist market? How do we take the movement forward after Prague? Is there a viable alternative to global capitalism?

The IMF, the World Bank and global capitalism

The IMF, World Bank and WTO are central pillars in the global economy and have been called the "architects of the world economy". The IMF and World Bank were originally established at the Bretton Woods Conference in 1944. They were mainly funded by the United States to re-build the shattered world economy after it broke down during the Great Depression of the 1930s and World War I

Ever since then, the IMF and World Bank have acted as an instrument for defending capitalism, maximising the profits of the big multinationals and maintaining the domination of the US over the world economy. Within this common framework there is a division of labour and functions between the IMF and World Bank although these have tended increasingly to overlap, and the two organisations work together quite closely. The World Bank makes long-term loans to governments to finance development projects such as roads, power plants, schools, dams, bridges, ports, etc. The IMF decides which countries are eligible for international loans.

'Structural adjustment programmes'

The IMF and World Bank will only extend loans if countries agree to accept 'structural adjustment programmes' (SAPs). SAPs are forced down the throats of the people of the former colonial world. To pay off the loans, the IMF and World Bank demand governments raise money by selling off public assets and companies (privatisation) and cutting state expenditure on social services like health care, education, and pensions. SAPs require countries de-regulate and "open up" their economies by cutting subsidies to local industries and slashing trade barriers and tariffs. Countries must open up their economies to the multinationals (usually based in Western countries), remove restrictions on foreign investments, and allow corporations access to the workers and natural resources of the country at bargain basement prices. The vast majority of the profits made by the multinationals are taken out of the country and brought home (repatriated) to the West. SAPs encourage export-oriented growth (selling cheap raw materials or commodities on the world market, like cash crops, garments, or computer chips) to generate hard currency. All in all, the IMF and World Bank SAPs turn countries into loan repayment machines, generating easy profits for the world's biggest companies and banks. IMF policies also both directly and indirectly impact on workers in, for example, Europe and the US. Because they are partially funded with public money, the IMF and World Bank redistribute wealth from working people in the West (through their taxes) and funnel it to programmes which benefit the multinationals. The effects of IMF/World Bank programmes are to lower wages and working conditions worldwide, which exerts a downward pressure on workers' living standards in the industrialised countries as well.