Thursday, March 18, 2010
World Bank and IMF Welcome Iraq Into the Debtor Nation Fold On this 7th Anniversary of the U.S. Invasion
On the anniversary of the U.S. invasion of Iraq, we learn that the country has come into the debtor nation/free trade fold, signing a $250 million loan agreement with the World Bank. Iraq is also taking $3.6 billion from the IMF. The World Bank and IMF are know to enforce neo-liberal free trade and spending austerity on loan recipients who probably need trade protection and spending to help their local economies.
Anup Shah writing for Global Issues describes common WB and IMF loan requirements:
* They prescribe cutbacks, “liberalization” of the economy and resource extraction/export-oriented open markets as part of their structural adjustment.
* The role of the state is minimized.
* Privatization is encouraged as well as reduced protection of domestic industries.
* Other adjustment policies also include currency devaluation, increased interest rates, “flexibility” of the labor market, and the elimination of subsidies such as food subsidies.
* To be attractive to foreign investors various regulations and standards are reduced or removed.
Shah goes on to describe the impact:
Governments therefore must:
* spend less
* reduce consumption
* remove or decrease financial regulations
* and so on.
Over time then:
* the value of labor decreases
* capital flows become more volatile
* a spiraling race to the bottom then begins, which generates
* social unrest, which in turn leads to “IMF riots” and protests around the world.
Along with bringing Iraq (formerly known as the Cradle of Civilization) to developing nation status, it appears that U.S. militarism will never change. The Pentagon Budget for next year is $708 billion with $56 billion being "black box" or classified and now we know why this will never change. According to OMB watch (citing a USA Today report), many members of congress in charge of Pentagon spending are knee deep in the defense industry.
World Bank and IMF Welcome Iraq Into the Debtor Nation Fold On this 7th Anniversary of the U.S. Invasion
On the anniversary of the U.S. invasion of Iraq, we learn that the country has come into the debtor nation/free trade fold, signing a $250 million loan agreement with the World Bank. Iraq is also taking $3.6 billion from the IMF. The World Bank and IMF are know to enforce neo-liberal free trade and spending austerity on loan recipients who probably need trade protection and spending to help their local economies.
Anup Shah writing for Global Issues describes common WB and IMF loan requirements:
* They prescribe cutbacks, “liberalization” of the economy and resource extraction/export-oriented open markets as part of their structural adjustment.
* The role of the state is minimized.
* Privatization is encouraged as well as reduced protection of domestic industries.
* Other adjustment policies also include currency devaluation, increased interest rates, “flexibility” of the labor market, and the elimination of subsidies such as food subsidies.
* To be attractive to foreign investors various regulations and standards are reduced or removed.
Shah goes on to describe the impact:
Governments therefore must:
* spend less
* reduce consumption
* remove or decrease financial regulations
* and so on.
Over time then:
* the value of labor decreases
* capital flows become more volatile
* a spiraling race to the bottom then begins, which generates
* social unrest, which in turn leads to “IMF riots” and protests around the world.
Along with bringing Iraq (formerly known as the Cradle of Civilization) to developing nation status, it appears that U.S. militarism will never change. The Pentagon Budget for next year is $708 billion with $56 billion being "black box" or classified and now we know why this will never change. According to OMB watch (citing a USA Today report), many members of congress in charge of Pentagon spending are knee deep in the defense industry.
